Have you ever wondered why you can't just negotiate directly with a storage facility or just payoff someone's late bill to get a unit? Or why storage auctions are advertised in obscure newspapers no one reads but attorneys and auction hunters? Well, here's some insight into the storage auction process .... and how to use this knowledge to your advantage.
Nearly all 50 states have statutes regulating how a facility must deal with a delinquent self storage unit. Although there are variations, basically the facility must legally notice the tenant over a specified period of time, which can cost the facility hundreds of dollars. The facility then has a lien against the property inside the unit. The lien gives the facility the ability to sell the contents if the tenant does not pay their past due rent before the advertised auction date. But the facility can't just determine the value of the unit or set the price at the amount of the past due rent. When the unit is sold at auction, the money pays the facility back for the delinquent rent and auction costs, but any extra proceeds are required to be returned to the former tenant.
So, what does that mean for you?
#1 Pay attention to facilities with infrequent auctions. Many facilities hold auctions several times a year, perhaps even monthly. Other facilities might only hold an auction every year or two because of the legal compliance and expense involved. This means more units and potentially fewer bidders .... and that means profit.
#2 Understand the facility's position. Auctions are a bit of a nuisance to facilities. There are strict procedures and timeframes to follow and the cost required to advertise an auction in a newspaper, as required by law, can be as high as $700! So if facilities seem inconvenienced by auction day, that's because they are. Remember, their business is renting units - not auctioning them off. While we understand that you are helping them recoup their lost rent they might not be looking at it this way. You'll be amazed what a simple "ma'am" or "sir" will accomplish when you are calling to confirm an auction or inquire about the number of units.
#3 Point out bad practices. Just because storage auctions are regulated by law doesn't mean facilities always follow the rules. If you are aware that a facility is doing a monthly haul to the local Goodwill, or having garage sales on their front lawn, then consider asking the owner to start holding public auctions.
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Here are a few links you might find useful:
Professional Self Storage Auction Tips
How To Locate A Storage Auction
Self Storage Units Containing Cars