Coin-operated laundry ROI in a 4-plex

14 Replies

I’m considering purchasing coin-operated washer and dry for a 4plex.  I’ve already determined the cost of the equipment itself. And I’ll price it better than the local laundromats. But I’m hoping someone can give me some type of metrics or rule of thumb to determine how many wash and dry ‘transactions’ I should expect a 4 unit building (2br ea) to use during a month. 

Hi David,

I’ve never found W/D to be that great of cash generator, but can certainly be a selling point if of course you don’t have room for them in the interior of the units. One good idea would be to inquire with your tenants and determining how many people occupy the unit. Ask how much they utilize a third party to do their laundry or how much they spend weekly at the laundromat, and lastly would they use the machines if provided for their convenience?

Hi David,

I'm not sure if I can give you a rule of thumb or matrics as to how many transactions to expect, but I can tell you want we experience.  We have laundry in a 15 unit building in the midwest which consist of about half 1 bedroom and half 2 bedrooms.  We chose to contract with a 3rd party to put in and maintain the machines obviously we pay for the water and electric.  The revenue is split 50/50.  The residents do have to walk to the back of the building to use the facility which is a slight disadvantage.  We average about 35-40 loads/month.  At one point we had 2 washers and 2 dryers but we removed 1 of each so we're back to 1 each.  What we find in general at this building is that people use the laundry as a stop gap for 1 load here and there, but tend to take 3-4 loads the laundry mat where they can do all of it at once and be done in about an hour or two.  It is, however as @Kim Meredith Hampton  mentioned, a nice selling point for potential residents. Hope that helps. 

Happy Investing,

Mike

@David Bardwell alternatively, if you would like to get some income on the space - try renting it as a storage space. 

An in-building coin laundry is a great perk; but in a fourplex getting a financial return becomes a little more difficult. At 1.75 per load (each machine) I'm getting 230-250 per month in a 12 unit. You can extrapolate from there. My tenants post the schedule and keep the room clean.

In a three fam, occupied by approx 12 total people, I have two sets each at 2 per wash and 2 per dry, and I pull about 175/275 a mo, sometimes for over due laundry they will just go to the laundromat mat. I find it’s always higher in the summer, too. 

Thanks for the great feedback. This is helpful. Even if I break even, I do think the 'perk' factor is important in my property since it's lacking in other areas such as parking. 

I would suggest charging as much as the local laundromat. Your tenants would prefer to do it on site than to travel elsewhere. So no need to reduce your revenue. I'm getting $2/machine/load. 

I have a 13 unit (all 2BRs) with one coin-op washer/dryer.  At $2/wash and $1.75/dry we are collecting approximately $195/mo.  There are other strategies regarding laundry in smaller buildings you might consider, i.e. just providing a W/D hook-up, renting them machines, or even providing machines if it warrants a good enough rental premium.  I once had a property where the residents brought their own machines and then asked if they could leave them when they moved out.  

@David Bardwell I would price it the same as local laundromats. People have to drive there which is a hassle. I had a 6 unit building with one washer and dryer and I was collecting $70 a week, that was with very low charge per load. I never looked at the counter. I always had quarters for parking meters...

You should be able to expense the washer and dryer immediately, so you can get some tax benefit. Ultimately it will be a revenue stream and more importantly it is a tenant convenience. 

@Mike Montana I am curious why you chose to split revenue versus owner operate? One washer and dryer is not a big investment and it is a tax write off.

@David Bardwell Two things:

1). We’ve charged a flat monthly fee ($50-90) for use of the W/D without any issues.

2). I’ve “heard” that coin operated is not a good idea. I’ve had some conversations with folks who do student housing, and maybe even read something here on BP forums about it. Coin laundry causes the tenants to ruin the machines by cramming more laundry than physics would allow to try and save a few bucks. The machines will break more often and wont last as long.

Our approach has been either a monthly fee, or FREE laundry as a perk. Won’t do coin operated.

I love Bigger Pockets! I'm closing on a 4-plex at the end of the month (my first)  and need to do something about the laundry situation. It's coin operated now, and the machines are pretty junky.  @David Bardwell what did you select for equipment?

Originally posted by @Joe Schmitt :

I love Bigger Pockets! I'm closing on a 4-plex at the end of the month (my first)  and need to do something about the laundry situation. It's coin operated now, and the machines are pretty junky.  @David Bardwell what did you select for equipment?

Have you heard that saying "You snooze, you lose"? I had an opportunity to purchase some used equipment for $250 a set, but someone beat me to it. At this point, I don't see any other viable used options in my market (Cleveland). I was quoted the following for brand new equipment though for what its worth.

MAT20PD Maytag COIN Washer $995 ea.

MDG20PD Maytag COIN GAS Dryer $880 ea.

He who hesitates is lost I guess. But maybe this is an opportunity. I was thinking about just leasing units in my 4plex and splitting the revenue, but it sounds like I'm too small for that. However, I'm guessing that I could stick a couple of decent HE units on a 12 month no interest card (that gets me some kind of reward), and give residents the option of a $29 on-site laundry fee. That would pay for the units in about a year and everything after that is pure profit. Way better than collecting coins, and nicer machines for the tenants too.

Originally posted by @Bruce Gardner :

@David Bardwell Two things:

1). We’ve charged a flat monthly fee ($50-90) for use of the W/D without any issues.

2). I’ve “heard” that coin operated is not a good idea. I’ve had some conversations with folks who do student housing, and maybe even read something here on BP forums about it. Coin laundry causes the tenants to ruin the machines by cramming more laundry than physics would allow to try and save a few bucks. The machines will break more often and wont last as long.

Our approach has been either a monthly fee, or FREE laundry as a perk. Won’t do coin operated.

I had never considered providing the units and just up-charging for usage. May be tricky to moderate in a 4 unit with the w/d units being in a common area. I foresee tenants "sharing" usage. Or unless they are under lock and key, just using them at will. Have you encountered these issues?

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