4 plex Coin Laundry

12 Replies

Just had a long term good tenant tell me that she would gladly pay an extra $25 per month If she didnt have to pay for coin laundry.  The washer/dryer work ok but are older and will need repair/replacement very soon anyway.  If she's serious, it would take rennt from $525 to $550 which would be on the top end for the local area.  Not sure about other tenants, but the idea of an easy rent raise where I know I would keep the tenant seems like a smart idea in a way.  Coin laundry brings in about $20-30 a month or so for the building, but I would probably end up with a bigger water/electric bill with free laundry and I'm not sure about the other tenants but most have kids so they might be pretty receptive too.  Her current lease is up in about 5 months and I could get a good deal on a new washer and/or dryer right now that will be more energy efficient.  Any ideas/opinions greatly appreciated.

Assuming that you will have the tenants in the building sign up and will be getting some type of rent increase. Have a short term agreement with tenants while you track (including tenant retention and turnover) your expenses on the new service you are offering. In 6 months you should know if it make sense to continue or not.  

My fear is that when you offer free laundry the tenants will be using the washer and/or dryer a lot more than before. 

If you can actually get $100/mo for free machines vs Coin-Op, the numbers look good. 

But. Will the area sustain that? I mean, when there's turnover of tenants, will the new ones pay that higher price, knowing the machines are part of the deal? 

The more general question is whether any amenities with real value can actually result in ongoing premium rent. When you list the apartment for (normal rent)+$25, will you get responses because you list that feature? I can list an $800 apartment, and even with gas/electric included, worth $150, easily, still have a tough time getting responses to a $950 advertised price. 

hey @Thomas Fosnaugh  , I agree with @Michael Henry  on this one. One of our 3 families has a washer/dryer in each unit. We get top of the market rent for the units but our water bill is ridiculous.  As an expense, its second behind the mortgage. I've even caught tenants doing laundry at their unit for friends and family. When its free people seem to take it for granted. 

I think it sounds like a good idea. I am not sure of your numbers but you may come out better by offering this amenity. I don't think your water and energy bill will increase all that much. 

You would probably need to monitor the "free units" if rent rates in that area are $500 per month it is a low income area and news of a free laundrymat might bring in more laundry than you might think...  Even if they are in a secure area they might suddenly start doing laundry for friends and family

Nick Miller is spot on. You will all of a sudden have all these other people using it...including family/friends of your tenants and other tenants in other building you do not own.

I don't know about how expensive your water bill is.  But think of it as a marginal expense. It's only going up because you are making more money!  When it comes to marginal expenses it should be 2:1 or 50%.  

If you are worried about the water bill, pass through the cost to the tenant.  Let them know you'd be happy to provide them a W/D for the extra $25/mo but that you are going to pass to them the increase in water usage.  Your water bill should provide a usage history, and you can show this to the tenants letting them know any cost in excess of (average usage +X%) will be billed to them monthly.

The real problem here being that the Tenant is going to end up destroying your W/D.  In my 4plexes I can only fit in Stackable Units and they are extremely expensive compared to side by side units.  And they will try to wash rugs, dogs, babies, and never clean the lint trap destroying the dryer unit.  

If you buy one for one Tenant you need to be prepared to provide for the other tenants as well.  Seeing as I just saw a brand new unit for sale at $900 here's some quick math:

$25x4unitsx12months = $1200!

4W/D x $900 = $3,600! 

Plus (Really Minus) $25/Mo CoinOp Income x 12mon = $300

So It'll take you almost 4 years to recoup the cost of just purchasing the things does not include any installation fees, additional billing expenses to pass the water bill to the tenants, any repairs or service calls you have to make to the property.

I thought it would be a great idea.  In hindsight here's the approach I would have gone with:

You are allowed to purchase your own W/D or do a Rent To Own with a company like Aarons.
There is a $10/mo water usage assessment and an additional $20 non-refundable cleaning charge.

Thanks for all the advice.  It is just one w/d for the whole building.

@Thomas Fosnaugh  It really depends on the type of property and type of tenants. 

My mother lives in assisted living where she pays hefty rent on her apartment, with all utiliites included and use of a shared laundry room (not coin op) with other tenants. The facility maintains the building and the appliances.

We have a coin-op shared laundry at our 8-plex. The income from the machines covers to the cost of the water, natural gas, electricity and machine maintenance for the shared laundry, on a very tight margin.

We thought about separately metering the 8 apartments for water and installing W/D hookups or providing W/D in each to make the units more marketable, but it wasn't cost effective for us to do so. 

Never thought about having a free laundry and raising the rent to cover it. I agree with others that it would be inviting misuse unless you can set clear rules and monitor it well. You would still need to maintain the laundry room and the appliances. 

Also, some households will use the laundry facilities more and some will use it less, so to cover your costs in an equitable manner, you could base the additional amount of rent on the number of people in the household. Even so, we have one tenant that just doesn't like to use a shared laundry, coin-op or not, and takes her laundry to the home of a relative.

Pay as you go on a shared laundry does seem the most equitable approach. If it is only one tenant who is having difficulty with this, then let her know you understand the inconvenience and offer to bring her a roll of quarters in exchange for a $10 bill.

Hmm, well I would be willing to bet some of these tenants friends/family figure out its free and other people would find their way into your pocket. I'm sure your tenant would LIKE to have that convenience but sounds like too much of a hassle, cost + maintenance on top of that for it to be as viable as it appears.

You could always tell the tenant that if she renews the lease at $550mo (which was what you were going to re-rent at anyway), and pays on time, she will receive a $25 discount that month to apply toward laundry expenses. Even if you played with the #'s or terms a little and done this for all your tenants I could see it being of benefit to you and them. 

You don't loose the tenant, no extra $ out of your pocket, and the tenant feels special....sounds like a win-win? Every tenant and landlord want the best of both worlds but it's not always possible.

Sometimes it's just that added incentive/reward to pay on time and the word discount that makes them feel special.

Originally posted by @Thomas Fosnaugh :

Just had a long term good tenant tell me that she would gladly pay an extra $25 per month If she didnt have to pay for coin laundry.  The washer/dryer work ok but are older and will need repair/replacement very soon anyway.  If she's serious, it would take rennt from $525 to $550 which would be on the top end for the local area.  Not sure about other tenants, but the idea of an easy rent raise where I know I would keep the tenant seems like a smart idea in a way.  Coin laundry brings in about $20-30 a month or so for the building, but I would probably end up with a bigger water/electric bill with free laundry and I'm not sure about the other tenants but most have kids so they might be pretty receptive too.  Her current lease is up in about 5 months and I could get a good deal on a new washer and/or dryer right now that will be more energy efficient.  Any ideas/opinions greatly appreciated.

I would not do it. After while people start to get careless. They will wash 1 or 2 items at a time, do other people's laundry or others outside your building will start using the machines. I have coin-op machines in my 4-plex and it only brings in $35-50/month. However I highly doubt anyone in my building would pay more for it to be free.

Originally posted by @Thomas Fosnaugh

Thanks  for all the advice.  It is just one w/d for the whole building.

Ooof.  I'd just leave it then.  Most other peoples points hit home.  

Unless you can make it into a coin consuming Mecca!  Soda Machines, Laundry Soap Dispenser, Arcade Machine, Candy Machine!  Ebay has a great collection of Coin Operated profit Centers: 

http://www.ebay.com/sch/i.html?_nkw=coin+operated  

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