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Daily Real Estate News | May 12, 2008
Self-Storage Bills Get Out of Control
The self-storage center is the latest to get a taste of the foreclosure crisis.
People who lose their home to foreclosure often rely on self-storage for their belongings. But some people cannot keep up with their storage bills any better than they could handle their mortgage payments. The result: storage companies auction off their property for a pittance.
''You tell yourself, 'I'm only going to put my things in for a short time,' '' says Wayne Blair, the owner of Blair Auction & Appraisal, which has been conducting sales at self-storage facilities in the Midwest for more than a decade. ''Before you know it, you're behind. Then you have to pay penalties and interest."
Blair says he's seen an increase in auctions in light of the foreclosure crisis: "If a site used to have 10 auctions, these days it has 15 or 20.''
When renters default on their monthly payments, facilities replace the lock with one of their own. That way, the renter cannot come around at the last minute and empty out his unit. Eventually, after the bills pile up, auctions are the only option.
Auction companies like Blair's drive bidders from site to site. The bidders can't enter the unit or touch anything; they must make their offers based on a glimpse. The contents of some units can sell for $1,000 or more; in other cases, bidders won't even offer $1.
Source: The New York Times, David Streitfeld (05/11/08)
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