Self storage auctions are the least-bad solution to a bad situation.
Ideally, your facility is full of happy tenants, paying their bills on time and not causing any trouble. This is how self storage facilities make money, and it’s a good business model! But sometimes you run into tenants who abandon their property or refuse to pay, and that’s where self storage auctions become necessary.
New technology and shifting regulations have eased some of the burdens of running these auctions, and we’ll go over the best ways to take advantage of online self storage auctions here.
All the labor hours you invest in running auctions is time that could be spent cleaning the facility, following up on leads, and renting new units. With auction prices averaging between $100-$1,000, there’s no guarantee that an auction will be worth the labor you put into them.
Pug Pro Tip: Check out our GabFocus session on online auctions and collections for more information!
However, if you can reduce the labor you’re putting into an auction, the numbers don’t look quite so bad. Online self storage auctions can quickly get your units cleaned and ready to rent. They also have the potential to reach a much larger audience, which in turn can lead to bigger bids!
Any business that can be done online is moving online. Even industries that are almost entirely service-based and in-person are putting what parts of their business they can online. Restaurants take online orders, grocery stores will not deliver, and you can buy a car without leaving your couch.
Self storage auctions are moving online, too.
Self storage lien laws have hampered the transition to online auctions in the past, but many state self storage associations have pushed for them to be updated. Depending on where your facility operates, you may no longer need to publish advertisements in the newspaper (which is good, since the newspapers are moving online too).
Check with your local self storage association to determine what exact steps you need to follow to list your auctions online!
Online self storage auctions can be beneficial for many reasons, including:
For a long time, lien laws required self storage operators to post ads in the local newspaper before they could auction off a unit, so many operators assume they still have to follow that outdated protocol.
However, most states now allow you to post the notice in more than just the local newspaper. In fact, online auction sites frequently count as a public posting of the unit’s sale! That means you can get your auction started and your notice posted at the same time, in the same place.
Check out our list of state self storage associations to discover the exact laws for your state! Remember that keeping yourself within the appropriate regulations is your responsibility. Whatever online auction service you use will not be paying your legal fees if someone alleges you sold their unit improperly.
Moving your auctions online will save you time and money, but if you can incorporate online auctions into your PMS… well, you’ll have to find some new hobbies to fill up all that free time.
Not all property management software can integrate with online self storage auction sites, but many do. One of the most popular, SiteLink, partners with several auction sites to save you from having to upload all the tenant’s data manually. This may not be a big deal if you only have to perform auctions once in a blue moon, but if your delinquency rate is high, data integration like this can be a lifesaver.
If your software doesn’t automatically upload tenant information to the self storage auction site of your choice, consider downloading our self storage auction checklist. This handy, customizable form makes sure you’ve completed all the legally required steps before sending your delinquent unit to auction. It’s part of our Self Storage Operator Toolkit, which has over a dozen helpful forms like it.
Because online self storage auctions are so much easier (and could bring in more money), there are lots of websites offering this service. You’ve got Lockerfox, SelfStorageAuction.com, StorageAuctions.com, Storage Treasures, and many more. With so many options available, choosing the right one is tricky. Here are a few facets to consider before deciding which service to use:
Cost - Do you have to pay anything to list your unit? Most online auctions just take a percentage of the sale, but some might instead require you to pay a fee to list on their site. An initial fee without a percentage cut could end up being the best option if your unit goes for a decent amount.
Marketing - How well does each website promote their auctions? Consider how many visitors they get, and from which areas. If they’re a hugely popular auction site in California, but you’re in Florida, you may not see the spike in traffic that you’re looking for. Also, if people in your area don’t know about them, your bids won’t get any better.
Of course, you can market your online self storage auction yourself, too. This could be a good investment if you tend to make a lot of money from auctions, but if you only do a handful it may not be worth your time.
Ease of Use - If you have a property management software with the capability, try to choose an auction site that integrates with it. If your PMS doesn’t have the capability to integrate with auction websites, then it’s important to choose the site you find easiest to use. Since auctions are rarely a high-profit endeavor, it’s best to get them out of the way as quickly as possible, with as little input from operators and management as possible.
Learn more ways to improve your self storage facility with these:
At StoragePug, we build self storage websites that make it easy for new customers to find you and easy for them to rent from you.
