Are Vending Machines Great For Multifamily?

Question

I was talking about this with a friend and we have split opinions. I think it would be great for a multi family building with 10 units or more and they don't believe it would be a good investment because you don't see vending machines in apartments, even with 50 units. Is it worth getting a permit and setting up a vending machine in a multifamily, with 10 or more units?

Has anyone set up a vending machine in one of their buildings?

Gino Barbaro · Answer

@Lucas Morales

This is my own personal opinion, with owning over 1,800 units. They don't really move the needle, unless you are in a very high traffic area. It can't hurt to try. You can always contact a company with vending machines, have them set up, and split profits.

If it works, great. If not, not a huge loss

I would love to know if it works for you

Gino

Benjamin Aaker · Answer

It's a good idea if your location is such that you don't worry too much about damage. Security is a big issue with these. Nowadays you need to consider credit card functionality, too. Also, make sure you have someone restocking the machine and not yourself. That's too much of a pain.

Chris Seveney · Answer

@Lucas Morales

If you have coin op laundry in the building as well make sure you have a machine that gives quarters as I have had people use the vending machine to get their quarters for laundry and you have to constantly restock it.

Personally I would say it’s not worth it unless you are far from grocery / convenience store. Just my 2 cents.

Robert Rixer · Answer

I think vending machines are very underrated. On a 5% cap building, every extra dollar of NOI equals $20 in value, so you should squeeze out as much as you possible can. You can do it yourself, but the best bet is usually contacting a vending machine company. They deliver the unit, service it, keep it stocked, etc. and then you split profits. Most people don't do it because it's a pain if you manage it yourself and for limited upside.

Evan Polaski · Answer

@Lucas Morales, whether you handle in-house or through a vendor, I would certainly make sure you understand who is responsible for damage and theft.

And as Chris points out, I could see a series of added expenses being needed. Possible coin machine needed nearby (although most are CC today), additional lighting for added security of both machine and customers.

To your point, you do see vending machines in the 200+ unit range, often near or in clubhouse and pool areas. When you have a pool deck full of residents and their friends, I can see real value. For smaller properties, my initial instinct is that the effort is not worth the few dollars a month you will make, but if it is nothing more than calling a few vendors to get pricing, it could be worth the minimal effort.

Joshua Christensen · Answer

The idea of managing vending is enough to make my head spin. Someone breaking into them, the damages, etc. If you're going to do it, I'd say split the revenue with a vending company. Drinks more than candy. We played with the idea of a Laundry vending for soaps and dryer sheets. There are more than one way to skin a cat. Just don't manage it.

I'm not sure there is enough volume on a 10+. I think you'd need to be in a 20+ before considering it.

Are Vending Machines Great For Multifamily?

Are Vending Machines Great For Multifamily?

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