Storage Scores: Buying and Selling Storage Lockers

CI - Jason Hartman Rental Property InvestingWith the advent of reality television programming, we’ve recently seen an influx of shows focused on the repossession of storage units. Shows like Storage Wars and Auction Hunters center around teams of buyers who travel, sometimes across the country, to storage units that have been repossessed or otherwise abandoned. Once on site, these buyers engage in bidding wars to claim the usually unidentifiable contents of the unit. Sometimes, a buyer gets lucky and uncovers objects worth large amounts of money—antiques, memorabilia. Other times, the value of the contents are more immediately obvious—electronics, DVDs, etc. But most of the time, these units represent a relatively normal household and contain extra linens, childhood stuffed animals, the occasional human ashes.

These shows have recently come under fire for their claim that what is happening on screen is in fact “real”—at best, a stretch. Valuable objects are planted in units, down-on-their-luck teams are given money to make bidding more competitive, things are carefully edited to give a certain sort of impression. But, as viewers of so-called “reality” television, it seems fair to say that we usually suspend our disbelief willingly.

In the real world, the process of buying delinquent storage lockers is a bit different. While these shows make it seem like the bidding pool consists of five or so teams of people, the actual pool is much larger, and the auction winner is anyone’s guess. And very rarely do units contain such treasure (to see the top five finds from 2011 go here)—usually, their contents are a great fit for garage sales, swap meets, eBay, flea markets, and thrift stores. Seldom do things actually sell for the inflated numbers presented by show cast members and even more seldom is the task, from auction to resale, accomplished in such a short amount of time.

If you’ve got an interest in buying and selling, storage auctions might actually be a great fit for you. To begin, perform an online search for storage auctions in your area or call local storage facilities. Reading online reviews for places might give you a good idea of the type of people using the business and provide an early idea about what kind of things you might find there.

Consider going to an auction prior to the one where you think you’ll buy to get an idea of how that particular auction functions and how financial transactions are conducted. When you are confident that you’d like to participate, arrive a few hours early so that you are able to take a look around and ask questions. Set a budget for yourself, and don’t exceed it. Remember that you’ll likely not find a hidden stash of treasure that will make you instantly rich. After you’ve acquired a unit, make sure you have a plan. It might be helpful to categorize the items by their value and perceived audience (trash, flea market, eBay) and have designated vehicles or trips to dispense the items.

The key to successful storage locker buying is in managing your expectations. And there is no reason to forget your favorite storage war show–remember the go-get-it attitude of the cast members as you embark on your next business venture! (Top image: Flickr | John Picken)

 

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Storage Wars – Reality Television Comes to the Self Storage Industry

You knew it had to happen. The self storage industry was going to find itself the target of a hot new reality television show. Well, it did happen. As you might have noticed, a little show called Storage Wars hit the airwaves with an expectedly warped version of reality. If you saw a crew like this nosing around your facility, you’d probably call the police. There are two ways to look at this.

The first is that over-the-top, unrealistic shows like Storage Wars will bring more attention to the industry, which is probably a good thing for those who already own storage units. More than a few people vegetating in front of their television are going to feel a light bulb pop on above their head and say, “You know what? We need a storage unit for all our crap.” Normally, trusting in the good judgment of the American public is a dangerous proposition, but reality television has been around long enough that everyone knows the game. It’s a skewed version of reality and only for entertainment purposes.

Find a cast of outrageous characters (we’re talking about you, Billy the Exterminator) and turn them loose in a previously boring industry. Of course, hilarity ensues. We don’t see that shows like Storage Wars are going to have any detrimental effect on those of who have made a career, not out of ransacking delinquent owners’ units, but from realizing there is a darn good potential for profit in this particular sector of real estate.

So, watch Storage Wars or don’t watch it. Enjoy a voyeuristic voyage into a world that, despite being called reality television, has nothing at all to do with the reality of the self storage industry. On the downside, now criminals are all too aware of the possible treasure trove of possessions that have been sitting right under their noses all along. Don’t be surprised if the incidence of break-ins goes up. The average self storage owner might have to put in that security fence or video cameras, but don’t worry too much. As a demographic, criminals are not that smart. Don’t believe us? Do a Google search on The Darwin Awards and prepare to entertained and amazed.

You also can expect that this present fascination with Storage Wars will soon pass into the dustbin of television history. Most of this kind of reality show has a very short shelf life.

The Commercial Investing Team

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