Making money from abandoned storage unit auctions is the most interesting side hustle I’ve ever done. For about a year, from 2010 – 2011, I bought several of these storage unit auctions. This post is all about my experience, and how you can give it a try if you’re interested.
Table of Contents
- How to Make Money From Storage Unit Auctions
- Storage Wars Reality TV vs. Stone Cold Reality
- What You Can Expect To Find In An Abandoned Storage Unit
- The Unexpected Dark Side Of Storage Unit Auctions
- How it works
- How to Make Money Buying and Selling Abandoned Storage Units
- Want to Give It A Try?
How to Make Money From Storage Unit Auctions
You’ve probably heard of the reality TV show Storage Wars. And if you’re honest, you’ve probably watched the reality TV show Storage Wars 🙂
The show is based on a group of people that buy abandoned storage units at auction, then sell the contents they find inside. In the show, storage units always have some crazy, unique, valuable, or interesting item which is sold for a profit.
The business model is as simple as they come: buy low, sell high. Pretty basic stuff.
Storage Wars Reality TV vs. Stone Cold Reality
Those of you that admit to having watched the show might expect to find something unusual and of value in every single storage unit.
<sarcasm> Shockingly, that’s not the case. </sarcasm>
In total, I bought just over a dozen or so units. Never once did I find an antique gun, some rare collection, fine artwork or valuable jewelry. In one particular unit I thought I’d found some real sterling silverware – that gave me a momentary rush, and it would have been a nice score, but it ended up being a silver plated set, not the real stuff (still, I was able to sell the set on eBay for $100, plus shipping).
You know why you never find truly valuable items in abandoned storage lockers? Because if the lockers had anything of major value in them, their previous owners would find a way to pay the storage bill and take their valuable stuff out.
Also, these lockers aren’t simply ‘abandoned’ – they belonged to people that were unable to pay their bills and as a result, they had their goods seized. People with valuable assets typically don’t “abandon” those things.
What You Can Expect To Find In An Abandoned Storage Unit
The things that you end up finding in a typical storage locker probably won’t “wow” you. Typically items are ‘abandoned’ because they doesn’t have much monetary value to being with. Many of the contents you find inside will most likely end up in a landfill, which shouldn’t come as a surprise since everything you own is garbage anyway.
In reality, what you find is someone’s life crammed into a few boxes, and it’s depressing as hell to go through all of the contents.
The Unexpected Dark Side Of Storage Unit Auctions
You find a lot of old clothing and some worn out shoes. Some linens. Old pots and pans. Tons of old papers (the amount of paper was always shocking to me) – things like bills, certificates, letters, phone books, notes, and junk mail. I couldn’t believe the amount of junk mail that I pulled out of the units I got!
Under different circumstances I might have been judgmental of the people that had lost their possessions to a storage facility, but in reality I wasn’t very different from the people whose things I was sorting through and had no right to be judging anybody.
I was unemployed when I got into this side hustle. This was during my dark year and I was looking for any way I could find to make a buck. Times were tough (and getting worse) and I knew that I could very easily be the guy that would soon be out of money, time, and luck.
The more units I bought, the more I realized each box I opened up and went through was part of someone else’s story. I couldn’t stop thinking to myself “this was someone’s life.” It would break my heart to find posters and pictures that once hung on the bedroom wall of some little kid.
I’d think of my own kids’ bedrooms and what someone else might think if they were going through our things.
The last storage unit I bought had a marriage certificate and a wedding photo album it it. That was it for me. I couldn’t handle it any more so I took the personal items back to the storage facility and asked them to return them to the owner. The facility manager assured me the items would be returned. I truly hope they were.
But I was done. I just couldn’t do it. Not only was it mentally and emotionally taxing on me, but the amount of physical effort that goes into this side hustle is more than you realize (isn’t that always the case!).
Not only do you spend huge chunks of your weekend driving all over town to attend auctions and bid on units, but the real work begins once you’ve finally outbid everyone else and win the auction (which always left me feeling queasy. I’d wonder why everyone else stopped bidding and wonder if I’d just overbid? Did the others see something I missed? The mind games were endless in this business.
How it works
Whenever a person rents a storage unit, the contents inside become collateral for the facility that is renting you space. When a renter becomes severely delinquent on their payments, the storage locker they’ve rented is seized by the storage facility owner.
A seized storage unit basically means that the storage facility denies you access to the facility and changes the lock on your storage unit. The delinquent renter then has two choices:
- Pay their bill in full, or
- Have the contents of their storage unit sold to pay their bill
Most storage facilities host an auction every 1 to 3 months to recoup their losses from those renters that go with option number 2. At these auctions, which are open to the general public, seized lockers are opened up one at a time and potential bidders can take a look at what’s inside (nobody can go into the locker, and you can’t touch anything).
Who Gets The Money Raised By The Auction?
First, the auctioneer gets paid for running the auction. Payment to the auctioneer can be anything from a flat fee to a percentage of the amount a unit sells for. The remaining proceeds of the auction are used to settle the renter’s debt. The remaining balance (if there is one) is given back to the original renter.
If the auction fails to generate enough money to cover the debt in full, both the facility owner, and the renter are out of luck.
At the end of each auction, the highest bidder is the new owner of everything inside the locker. Most bidders are buying these lockers with the intent of selling the contents for a profit. But before you can sell anything, there’s a lot of work to be done.
How to Make Money Buying and Selling Abandoned Storage Units
Clearing out a storage unit is pretty much like moving. If you’ve ever moved from one home to another, then you can appreciate how hard this side hustle can be. You load boxes and furniture into a truck, drive it to the new destination (usually your own home), unload all of it, unpack it to find out what you’ve just bought, then sort everything into three piles:
You do this for every storage locker that you buy. If you buy multiple units in a weekend, then congratulations – that’s the equivalent of moving multiple homes in a weekend.
The storage facility gives you 48-72 hours to get your newly purchased items out of the locker or else you forfeit the contents (and your money).
The keep pile
The stuff in your keep pile is to be sold. You all know how to take pictures and list items on eBay and Craigslist. It’s time consuming. You have to respond to questions and low ball offers, meet people to do transactions, or possibly pack and ship items off to your buyers.
Selling on eBay and Craigslist isn’t my idea of fun, but that’s the best way to quickly unload your new possessions.
The unsure pile
Items that you don’t know much about will go into this pile. After doing some research on these unsure items you’ll move contents to either the keep pile (where they’ll be sold) or to the trash pile.
The trash pile
Your trash piles gets very large, very fast. That’s because most of the things you find in these storage units doesn’t have a lot of monetary value. I ended up separating my junk pile into three more piles:
- Donate pile
- Scrap pile
- Trash pile
Items that had some value, but weren’t worth my time to try and sell made their way to the local thrift shop where I’d donate them. Items in my trash pile that could be scrapped were taken to the salvage yard and sold for a few bucks. Everything else went to the local landfill (which, by the way, cost me about $25 per load to drop off).
All of what I just said can be summed up very simply: buying and selling abandoned storage units takes a lot of time and there was very little financial return.
Want to Give It A Try?
If you’d like to making money from storage unit auctions, here’s what you’ll need to know.
First, you need to find out where and when the auctions are held. The best way to figure this out is to call a storage facility and ask them when their next auction is being held. Some facilities post auction dates on their websites, so you can check there as well. Most facilities also keep an email list, so you can ask to be notified of upcoming auctions via email if you’d like. You can also do a search on Craigslist or your local classifieds sites for dates.
When you find an auction that you’d like to attend, be sure to show up a few minutes early. If you think you might bid, then you’ll need to register as a bidder. Registering in no way obligates you to bid on any unit, it just gives you the right to do so. Usually before the auction starts some ‘ground rules’ are announced. Typical rules are “don’t go in the unit.” Or “don’t touch anything inside the unit” and most importantly “if you win, payment is due immediately.”
So if you’re planning to bid, bring cash. Credit card and check payments are generally NOT accepted by the auctioneer.
You’ll also need to bring a padlock, and probably a flashlight as well. Units are dark and the flashlight can help you see what’s inside. That’s kind of important if you’re trying to quickly estimate the value of the unit. The padlock is in case you win. If you do, the locker is immediately yours. Close the sliding door and lock it up till you’re ready to come back with your truck and trailer to unload it.
Don’t Get Caught Up In The Excitement
A couple of parting tips. When you’re buying and selling abandoned storage unites it’s very easy to get caught up in the excitement of the auction and overbid. To make sure you don’t do that, set a maximum amount you’re willing to spend. Do this BEFORE the bidding starts, and stick to your guns. I was good at this and it’s why I never lost money on the units I bought.
Here’s a rule of thumb for evaluating the worth of a unit – assume “$10 bucks a box.” Supposed you see 20 boxes but don’t know what’s inside. Assume each of the 20 boxes is worth $10 and feel safe assuming there is $200 of value in total.
I always tried to double my money. So if I felt like a unit was worth $200, I’d only bid up to $100. This strategy kept me from buying a lot of units, but I also never once lost money on a locker.
The emotional baggage that comes from storage unit auctions ended up bothering me too much. If that doesn’t bother you then this can be a really interesting way to make a few bucks on the side, but I think I’ll just stick with blogging as a way to make extra money instead.
This post was originally appeared on Camp FIRE Finance and is republished here with permission.