By Tiana Bodine
Storage auctions are big business these days. What was once a
little-known method for getting rid of a tenant’s abandoned items has
turned into a major draw for treasure hunters looking for a profit. This
is due in no small part to the popularity of reality TV shows about
storage auctions, like the ever-popular Storage Wars and its spin-offs.
Now, thanks to an increased demand for resalable items and the allure of
the auction format, storage auctions are gaining in popularity and
revenue. Some organizations even hold storage auction-style sales to
generate money for charity!
With all that money changing hands, it’s easy to assume that storage
facilities are getting rich off of auctions, but that is generally not the
case. In fact, high profits can create headaches for storage facilities.
This is because most states have a law that the facility must use the
proceeds to cover the rent owed on an abandoned unit. Any profits beyond
that amount are supposed to be returned to the delinquent tenant.
In reality, this doesn’t always happen, in part because getting hold of
the tenant to reimburse his money is usually not possible – if he could be
reached, his unit likely wouldn’t have gone up for sale. So the owed
money ends up in a state’s escheatable funds account, waiting indefinitely
to be claimed.
If storage facilities aren’t making profits from auctions, why are they
Usually, because an auction is an easy way to get a unit cleared out and
ready for the next tenant. Cleaning them by hand is time-consuming; it’s
much easier to have them emptied by interested buyers. This keeps units
available to rent out to paying customers.
Auctioneers, on the other hand, do make a profit from the auctions they
hold, and those profits go higher as the price of the units goes up. This
is because auctioneers are paid a percentage of the total for the day.
It’s in the auctioneer’s best interests to encourage high bids.
More recently, tenants themselves have even begun to get in on the act. A
person who cannot pay his storage bill or has no interest in emptying it
himself might run an auction and pocket the money. Setting up an online
auction makes this easy: The tenant can just take some photos and post a
description of the unit’s contents and wait for bids to come in. Once the
unit is sold, he can exchange the contents for the money and rest easy
knowing he doesn’t need to deal with the unit himself.