Auctions are too Expensive Part 1

In the course of our auction business often come across situations where people feel that our services are too expensive or that we will not get enough money for their things at an auction.  One of my favourite sayings is that no one get rich at an auction.  This refers to both the seller and the auctioneer.

You have to ask though what are the alternatives?  The first one that comes to mind is I could put the things in public storage.  This does make the problem disappear, at least out of site is out of mind.  This seems to be everyone’s go to solution.  Here are some statistics from the US

Storage Revenue in the U.S. self-storage industry according to IBISWorld

2014 (estimate) $29.8 Billion

2015 (Estimate) $31.6 Billion

2016 (Forecast) $32.7 Billion

In Canada the current estimate is $2 Billion with a 5.1% growth from 2011-2016

 

Seeing that our population is approximately 1/10th of the US that number falls right in line with their numbers. These are Staggering numbers, with the Population of Canada at 35 million this means approximately $60 for every Man, Woman and Child per year. This is big business and growing bigger.

How much storage do we really need?

 

Number of self-storage facilities in the U.S.                           54,009 (2015 forecast)
Amount of rentable self-storage space in the U.S.               2.63 billion square feet (2014)
Amount of self-storage space per capita in the U.S.           8.32 square feet (2014)
Percentage of U.S. households that rent a self-storage unit        8.96% (2013)

What is the cost of a storage Unit.  There are many variables determining the cost of a storage unit.  The first is the location.  Smaller towns are cheaper than larger cities.  Then there are considerations of where you are in the city.  Like houses some areas are more expensive than others.

The next thing is how much storage do you need. A medium (10′ x 20′) unit is the most common and will hold approximately the things from 3 rooms in a house. Note I did not say a 3 bedroom house I said 3 rooms of a house.

S – Smaller market (pop: 50,000 – 80,000)

Mid-sized market (pop: 500,000 – 800,000)

Large market (pop: 1.5 million and up)

 

5×5 Storage Unit Prices

  • S – $20 to $35 M – $33 to $55                        L – $50 to $85

5×10 Storage Unit Prices

  • S – $20 to $35 M – $33 to $55                        L – $50 to $85

10×10 Storage Unit Prices

  • S – $80 to $100 M – $90 to $120          L – $140 to $160

10×15 Storage Unit Prices

  • S – $100 to $120 M – $125 to $150        L – $175 to $200

10×20 Storage Unit Prices

  • S – $100 to $150 M – $175 to $200        L – $250 to $280

10×30 Storage Unit Prices

  • S – $165 to $175 M – $200 to $220        L – $275 to $300

 

Then there are the addons:

Addons

Climate Control Add 15%

Indoor Structures Add 50%

Term length Monthly is more expensive than yearly or even longer terms are available

Now storage rental as a short term proposition, you’ve sold your house and are looking for a new one or waiting on a close date makes sense.

Spending over $2000 a year to store things does not.  This in most cases is close to the worth of the items and trust me they are not likely increasing in value.

We’ve all seen the TV shows Storage Wars… and a host of others.  There is usually a clause in the storage contract the says if you default on payments for than a certain period.  The goods in the locker are considered  abandoned and the storage operator will sell the contains quickly and cheaply to recuperate their costs. If this does not cover their costs you could still be on the hook for the balance!

I never did find numbers for how many are rental units are abandoned but you can find monthly auctions featuring several abandon locker just in the KW area!

 

3 Comments

  1. Greetings! This is my 1st comment here so I just wanted to give a
    quick shout out and say I genuinely enjoy reading
    your articles. Can you recommend any other blogs/websites/forums that
    cover the same subjects? Many thanks!

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