What you need to know to hold a successful storage auction
Jessica McFall |March 24, 2017 |3 min read
With the high viewership of reality shows like Storage Wars, storage auctions have become increasingly popular. Many people are regularly attending and bidding in storage auctions in hopes of finding items of high value that can be resold. Subsequently, companies like Storage Treasures have become even more successful. It’s no secret that storage auctions are a popular pastime of antiques dealers and tinkerers. If you’re a storage facility owner or manager, you might be wondering how you can take advantage of this popularity. Your state laws may prohibit you from turning a profit on your storage auctions, but a successful auction can certainly help you collect on the money you’ve lost due to tenant delinquency. So, how do you hold a successful auction? Read on...
Know the lien laws pertaining to storage auctions in your state
Perhaps the most important factor in holding a successful storage auction is understanding how to do it legally. Lien laws can be complicated, and it’s paramount to ensure you follow them. The last thing you want is legal trouble! Get familiar with your state’s lien laws, and make sure you know your local tax rate for auctions as well so you can ensure you process the auction tax accurately.
Make the rules clear
The whole point of holding a storage auction is to collect the money your facility has lost due to nonpayment and to empty the delinquent unit so you can rent it out to a paying customer. Of course, you already know you might not earn all the money your facility has lost due to nonpayment of a unit, but the last thing you want is to have to clean out someone’s unit and lose even more money paying to haul off someone’s junk. Make sure your auction attendees know your rules and standards for prompt payment and clearing out the unit they purchase.
Give your tenants plenty of notice
Once your tenant’s account is so far past due that an auction is necessary, it’s unfortunate for both of you. Your tenant doesn’t want to lose their belongings, and you don’t want to put them in that situation - but you’re losing money, so it’s necessary. You’re probably aware that actually earning a tenant’s full past due balance from an auction isn’t likely, especially if they aren’t storing anything of real value. You’re better off getting the tenant to pay their balance by being as lenient as you can while still holding close to your policies - this is more likely to yield better financial results.
Promote your auction
This is a very important factor in holding a successful storage auction. People have to know about your auction. Sure, people who are regular storage auction attendees are always going to show up, but why not capitalize on the current popularity of storage auctions and draw more people than you’d normally have at your auction? Also, consider holding your auction at one of the various online auction sites like Storage Treasures. You won’t have your bidders onsite to immediately clear out the unit they’ve purchased, but promotion will be very simple and you might have more potential buyers.
Process auction results right away
Auctions move very quickly. After all, one of the hallmarks of an auction is a fast-talking auctioneer. For a successful auction, processing the results of the auction should happen as soon and as quickly as possible. If your facility management software has the ability to schedule and process auctions, this will be easy for you. If not, make sure that you stay organized because you certainly don’t want to run into legal problems because you haphazardly processed auction winnings in a way that wasn’t in accordance with your state’s auction lien laws.
Thanks for reading! If you liked this article, you may also like: How to Make a Strong Craigslist Ad, How to Prevent Pets from Being Stored at Your Facility, and How to Handle a Price Increase.