Storage units in Athens grow in popularity

It is a murky Monday morning in January outside of Crazy Ray’s Self Storage. The location sits on the outskirts of Athens near the Madison County border, and looks to be in the middle of nowhere.

Regardless, a crowd of approximately 50 file their way into the offices and another door outside to the gated lots inside the business’s black, iron gates. Although the number of units that were planned to go to auction is cut in half, the crowd remains.

“When the process started, we had 24 units,” said owner Ray Teaster. “By the time we got to the auction time, and we give them right up to 10:00 to come in and pay. We had 11 units after all of that.”

After Teaster, also taking the role of auctioneer gives a rundown of the rules, the crowd makes its way to the first unit up for bidding.

Welcome to the Athens version of “Storage Wars,” where the bidding is done on Southern time, the units go cheaper and bystanders watch to see who gets the unit of the day.

But what is quickly learned is that there is more to an auction than the free and fun entertainment. The work behind the scenes is immense.

Running the Business

Crazy Ray’s Self Storage came to existence in 2004. Under the ownership of Teaster, the business has clawed its way to success.

“It’s kind of a hard business to get started, because you have a lot of cash outlay in the beginning, and you start out with no tenants,” Teaster said. “It is scary in the early going, but you do customers right, you get a clean facility and you do things right.”

And Teaster’s work shows he does things right. Not only do residential tenants in the process of moving use his company’s storage space, but other businesses including Pepperidge Farm rent as well.

“It’s a pretty wide variety,” he said. “We get a lot of people who may be moving and need storage for a few months. And we got the commercial people.”

Of course as a business that measures its success by the number of units in use, the business is always looking for more tenants.

From foreclosure to auction

Georgia has clear laws when it comes to storage units that are foreclosed.

Enacted in 1982, the “Georgia Self-Service Facility Act” gives the guidelines required in the state.

According to the law, after the tenant has been in default for 30 days, the owner can start the process to enforce his lein – or the right to keep a property until debt is paid.

Teaster usually gives more time, and gives the customer all chances possible to avoid the auction.

“We go as long as we can, and usually it is like 90 days before we even bring one up for auction,” he said. “At that point we send the customer a cut-lock notice informing the customer that we’re going to cut their locks and see what’s in the unit.”

After the owner contacts the renter numerous times heeding warning of losing the unit, the owner then has to run an announcement in the newspaper stating that the units will be auctioned off. In Athens, the notice has to run in the Banner-Herald once a week for two consecutive weeks.

According to the Georgia Self-Service Facility Act, “The advertisement shall include: a brief and general description of the personal property, reasonably adequate to permit its identification; the address of the self-service storage facility, and the number, if any, of the space where the personal property is located, and the name of the Occupant; and the time, place, and manner of the public sale.”

These laws add to the costs acquired by Crazy Ray’s.

“We probably spent $150 or so in certified mail and newspaper advertising,” Teaster said.

While there is public unfamiliarity with the law, the Better Business Bureau has mentioned ways to avoid potential problems.

“While most facilities are operated by reputable businesses, Better Business Bureaus field complaints from time to time regarding theft or property damage and rental disputes,” the release said. “Consumers are advised to shop carefully before signing on the dotted line.”

It’s good to know the cost, payment and climate of a unit before buying a locker. The BBB also recommends that people check with them for a report on the facility before signing a contract.

Increased Popularity

The numbers of people that participate in unit auctions have increased in recent years.

People credit that to TV shows such as A&E’s “Storage Wars” and the spinoff shows based in Texas and New York.

Bidders on the units, have a strong disdain for the show, believing that with the influx of people the prices of units go up.

“The TV programs have put so much out there about how many deals and things you can find. More people are coming that affects me that they have raised the prices more,” said Vic Peel, owner of Vic’s Vintage in Athens. “They come out looking for bargains, get caught up in the bidding process and end up paying way more than the unit is worth.”

While Peel is based in Athens, his bidding takes him nationally and globally. At about six auctions a year, he goes from Florence, S.C. to New Orleans, as well as Spain and Japan to find vintage items.

“I mainly [look for] chairs, if I go to a storage unit and see chairs, vintage chairs,” he said. “[From the] late ‘40s to early ‘80s, that is my main thing.”

Teaster says he doesn’t see an increase in the prices of his units due to the show. The storage units still bid in the low hundreds.

“Quite frankly, I don’t know if it’s had that much of an impact on us, other than the number of people that show up,” he said. “We probably double in the number of people who show up, but the same people who bought are the same ones buying.”

While Crazy Ray’s has not changed its procedures following the show, other storage auctions have.  Some auctions have resorted to charging admission fees or limiting the number of people who can attend.

Not In it to Bid it

The self-service facility business is not the auction business.

For storage units, the point of an auction is to make back the money that the tenant did not pay in rent. In other words, the parts that we don’t see on television are the real reasons the units are up for bid in the first place.

“We prefer our rent, we do not want to auction people’s stuff,” Teaster said. “But we have to have vacant units. We can’t let them be filled and not be collecting any revenue. That would sink the business pretty quick.”

Rarely do the auctions make up the money lost by the default payments. In the rare occasions it does, Teaster gives the difference back to the unit’s original tenant.

While the auctions are fun to watch despite being nothing like “Storage Wars,” the potential of profit is solely on the bidder. Owners, such as Teaster, still ultimately lose out.

“It’s not our goal to have auctions, we don’t want them,” he said. “We want to collect our rent money. We rarely collect what’s owed on the units. We’re a lot better off if our units are paid for, not auctions. It’s not profitable for us.”