What about the money? When we started, we didn’t have any extra money, things were tight. We waited for our tax return money to come, and set aside a small amount from that check for the storage unit business.
How much money will you need? You will need money for the auction itself. We have purchased units as low as one dollar and as much as five hundred dollars. It could be higher in other states and depends on your competition’s budget.
Decide on what you can afford to lose. In our area, we are not allowed to go inside the unit or to open anything until we have purchased it. Many items are in boxes, bags, or suitcases. We bid with an assumption that we will make a certain amount of dollars back on a unit. We count the boxes/bags/suitcases and estimate an approximate resale value. This is a gamble. We may not make the money back. It is possible that every box or bag in the unit contain garbage. Sometimes, all you can see is cardboard boxes and you open them to find clothing in all of them with stains, rips and holes and you cannot resell them. Sometimes each box has a valuable collectible that you can resell and make your money back on the unit from just one box. Consider a limit that is comfortable for you to lose if you get a bad one.
Out of the many storage units we have purchased, we have only gotten “burned” a few times so a bad one is unlikely to happen. Normally the ones that are really bad are not bought by anybody.
From the television show, Storage Wars, they most likely show you the best out of very many units up for auction that day. Very rarely do you see the bad ones because people who buy units on a regular basis don’t buy the bad ones.
Now consider additional expenses for auction day. You will need a way to haul the items you win. Many storage unit businesses only give you until noon the next day to empty the locker. Do you drive there with a trailer or truck to start hauling items, even though you may not win an auction that day? If it is far away, it would be wise to do this. If it is nearby, you could win the auction, take as much stuff you can fit in the vehicle you came in and then come back to get your stuff with the trailer or truck. What if you don’t have a trailer or truck? Can you borrow one? If not, you will need to research how much it would cost to rent one. Will you need to pay for extra time and rent this unit?
When buying an abandoned storage unit, decide on what you can afford to lose and consider additional expenses for auction day.
Sometimes the auctions are a caravan auction, which means that a large storage unit company that owns units in different locations will have them all on the same day. You start at one location in one town, then drive to the next location. Sometimes they are in the same area, just a few miles from each other. Sometimes they are 45 minutes apart in another town or city.
You have to follow the caravan or you won’t get to bid. During these, you don’t have time to stop for the bathroom or a bite to eat or you will miss a location and if they leave too soon and you don’t have a list of where they are going to next, then you will be done bidding for the day. You will need to plan to bring beverages and snacks, and may need to eat out if your last auction is an hour or two away from home and it’s dinner time. Don’t forget your buddy! It is very difficult to do this business alone. You need someone to help you lift the big items and it is safer to travel in a pair. Make sure you keep your help fed and hydrated. Plan for those food/drink costs.
When you plan the gas money portion of the budget, plan for several trips if necessary. Consider if you will be hauling a trailer or using a rented or borrowed truck and how much extra gas it might take. Will your buddy be bringing his/her own vehicle and/or trailer for your benefit? You may want to put gas in that vehicle too. It is kind of like when you are moving from one house or apartment to another.
In making out your budget, you will take a guess at how much all the items listed above add up to be. In the Auction Budget provided, pencil in these numbers. Keep the total at an amount you can afford to take a risk of loss on.
Plan for other extras like garbage/recycling fees, locks, rubber gloves (sometimes it gets messy), garbage bags (lots of them), flashlight, tape measure (to see if a large item will fit in a vehicle or to measure an item if you have time to sell it out of the unit)
Look at the total of all of your possible expenses. If it is over your budget, you will have to adjust the cost of the unit. Do not bid higher than that unit amount and remember to adjust it mentally if you see a lot of garbage, mattresses, or TV sets that you may have to dispose of. Also adjust if you think hauling or gas will be more money. Bring your total amount in cash and get receipts for everything, even if you have to drive to their main office to get it. There are very few auctions that we know of in our area (Wisconsin, USA) that accept any other form of payment besides cash and you usually have to develop a relationship with the owner before they would accept a check. You can call their business office ahead of time to double-check the form of payment accepted.
Now you have your budget for the auction!