How to Make Money Flipping Storage Units November 2024

If you’re on the lookout for another income stream, you may consider storage unit auctions. You’ve likely seen it on TV on shows like “Storage Wars” or “Auction Hunters,” but they don’t necessarily show the reality of what you’d experience.

There are risks and rewards to consider before considering buying a storage unit in an auction, such as the fact that you can’t see a unit’s contents until you win the auction or that you may find valuable items that more than pay for the price you paid for the entire unit.

Keep reading to learn the ins and outs of making money with storage auctions to determine if it’s right for you.

What is a storage unit auction?

When renters miss multiple payments on their storage unit, the owner can take ownership of the items and sell them, often via an auction. Because storage unit owners aren’t in the business of taking possession of items, appraising and reselling them, they prefer to sell the items at auction to the highest bidder, which opens up investment opportunities for you.

How do storage unit auctions work?

When you bid on a storage unit, you bid on the entire unit and its contents, typically sight unseen, with the exception of being able to “peek” at the items through the doorway. Every auction works differently, so I suggest always reading the fine print or asking questions before participating in one.

Keep in mind that there’s no guarantee that you’ll find anything valuable in the storage unit if you win the auction, but that’s a part of the risk for this type of side hustle. I suggest using only a small part of your capital for this opportunity, while looking for other ways to diversify your income.

There are three phases of storage unit auctions to understand:

• Before the auction: Do your due diligence before signing up for an auction. Find out as much information as you can, such as how many boxes are in it and how to register. Some auctions require you to pre-register online or you cannot participate. This is a good time to set your budget based on any information you have about the storage unit; it’s easy to get caught up in the excitement at an auction and overbid.
• At the auction: Arrive early so if you can get a peek at what’s inside, you’ll have a good view and ensure you have adequate cash with you if you win the auction. You may need to pay the entire amount or at least a deposit until you fully clean out the unit.
• After the auction: Every auction is different, but you typically have 24 to 48 hours to pay in full and clear out the storage unit so the owner can rent it out again. Keep in mind that you cannot keep firearms (must be turned into law enforcement) or personal pictures. You typically won’t receive the title for any vehicles and can only sell the parts, but this may vary depending on the circumstances.

How to make money with flipping storage units

Making money flipping storage units has similar risks as other investments, and there’s no guarantee of earnings. Here are the steps to bid on storage auctions and what to do if you win to help you understand the process to determine if investing in storage units is for you.

1. Find an auction

Storage auctions, also known as lien sales, occur at self-storage facilities. When a unit renter doesn’t pay their monthly rent for a certain period of time, the storage facility can put a lien on the property. If the tenant doesn’t respond or pay within the state-required notice period, the storage facility can legally sell the contents of the unit.

How long tenants have to pay before their items are auctioned varies by state lien laws and storage facility policy. For example:

• New Hampshire: In New Hampshire, tenants are in default if they’re late 30 days or more. The storage facility must send the tenant a notice of the default and intention to sell the storage unit contents. The renter has 14 days after receiving the notice to pay the owed rent and late fees. If the renter doesn’t pay the necessary amount, the storage facility can legally hold an auction for the unit’s contents.
• Florida: In Florida, the timeframe is shorter. The unit is in default after payments are just five days late. Storage facilities must send the tenant notice that the unit will be up for sale if they don’t pay within 14 days. After 14 days, the facility must publish an advertisement in a newspaper once a week for two consecutive weeks. After 15 days of the notice being placed in a paper, the auction can occur.

Auctions are in person or online. To find auction listings near you, I suggest you check the classifieds of your community or city newspaper, contact local storage facilities such as Extra Space Storage or Public Storage, or search online through the following sites:

• StorageAuctions
• CubeSmart
• SelfStorageAuction
• StorageTreasures

2. Register for the auction

Self-storage unit auctions are open to the public. To bid, either in person or online, you typically need to be at least 18 years old and have a valid photo ID. Contact the storage facility or site to find out how to register ahead of the auction. With most online auctions, you can register via their websites by creating a profile, but some in-person auctions require registration on the day of the auction, so I suggest arriving early.

3. Bid on a unit

Once you've found an auction you're interested in, you can prepare to bid on a unit. Keep in mind that you cannot bid on individual items. You can only bid on the contents of the entire unit. Exactly how auctions work are dependent on whether they’re in person or online, but with both, the unit goes to the highest bidder and you typically need either a down payment or the entire bid (in cash) available after winning the auction.

Live auctions

If you attend a live auction, you'll want to dress comfortably and be prepared to spend several hours walking around the facility and inspecting units. You won't be allowed to enter the units, but you can visually inspect them from the outside. It's a good idea to bring a flashlight to look at the units.

Bidding happens quickly, so it’s a good idea to set a budget for yourself and stick to it. Start small when you’re just starting out until you gain experience with reselling units.

You often have to pay in cash at live auctions, so be sure to have bills on hand and not just a credit card.

Online auctions

Online storage auctions are a bit different. If you're bidding on an online auction, you'll want to do your research ahead of time by reading the descriptions of the units and looking at any available photos.

If any larger items are visible in the photos, such as furniture or electronics, see if you can research the brands to find out what they typically sell for secondhand. Unfortunately, the listing may also be vague, just listing “totes,” which doesn’t give you much to go on.

With online auctions, you can pay with credit or debit cards, or you may need to make arrangements to pay cash in person. Some online auctions charge added fees. For example, StorageTreasures.com charges a 15% fee (10% for Pro members). You may also need to pay a refundable cleaning deposit.

4. Clean out the unit

You had the high bid on a unit and won, congratulations! Now comes the real work. After winning an auction, you have a limited amount of time to clean out the unit and haul away its contents. Depending on the storage facility, the typical time is 24 to 48 hours, so you may need help moving large or heavy items and a large SUV or truck.

When you start emptying the unit, be sure to wear gloves and a mask to protect yourself from any dust or debris. If you come across any hazardous materials, such as cleaning chemicals, poisons, or flammable liquids, be careful handling them and contact the appropriate authorities for guidance on how to dispose of them.

Depending on the size of the storage unit you won, you may want to rent your own storage unit to store the items while sorting through them. Consider this a part of your cost of the investment and figure it into your budget. This allows you more freedom to sort items into “sell,” “donate,” and “trash” piles.

5. Sell your finds

If you’re wondering how to make money on storage auctions, it all comes down to your ability to resell your finds.

Once you’ve cleaned out the unit, go through the items and see if any of it is valuable on the resale market. Depending on the items, you could use the following sites to sell your unit contents:

• Gazelle: If you find used electronics, cell phones, or computers, you can resell them on Gazelle.
• Craigslist: Craigslist is a good place to sell large items, such as furniture.
• Facebook Marketplace: Like Craigslist, Facebook Marketplace can be a useful tool for selling furniture and electronics.
• Poshmark: If the unit has clothes, shoes, jewelry, or handbags, you can sell those items on Poshmark.
• eBay: For other items, such as toys or collectibles, eBay can be a great way to reach buyers nationwide.

If there are items in the unit that you aren’t sure what their value is, consider consulting with an expert. The value of some items, such as coins or baseball cards, can range from a few cents to thousands of dollars, so getting an expert opinion can be invaluable.

FAQs

Bottom line

If you love the thrill of the hunt and are willing to take on some risk, storage unit auctions can be a great way to earn extra cash. Before diving in, research the process and understand the risks. That way, you’ll be in a better position to spot a bargain and make some money. When you're ready to get started, check out local auctions or bid online, while also considering the other best side hustles you can do.