I recently bought a 14 unit garden apartment value add deal and currently am trying to get the laundry room situation dialed in. The current laundry room is small and can only accommodate (1) washer and (1) dryer. A couple of the units have plumbing for washer and dryers but I plan on safing all of that off as I go and remodel each unit. I pay for the water so it doesn't make sense for me to let them do that in unit anymore.
I have a proposal from WASH to install the units, maintain them, and then give me a check for 50% of the gross every month.
- Is this a good deal for me and comparable to what other companies could offer me? I am self managing from 2 hours away so I do need someone that can handle the laundry and collect the money as opposed to doing it myself.
- Has anyone had experiences with WASH and can share how it was?
- Any other tips, tricks, or pitfalls as I gear up to sign a lease with these guys? It's either a 3 or a 5 year lease term...
I do not have any experience with WASH, however, both of our properties have laundry rooms and we can go up to two months before having to empty the change. I guess it depends on how many people are using them.
We have not had any repairs recently either. The commercial washers/dryer seem to last a good while.
We make a good chunk of change on the laundry too. :-)
For us, it's worth it.
@Mark Vieira a number of people I know say that the companies that rent machines to owners are terrible. When the owners finally did it them selves the machines seemed to make more money (the conclusion being that someone was skimming). The contracts are completely one-sided (toward the washer company) and its nearly impossible to get out of them as they keep rolling over. If you are doing a value add then buying and managing them yourself will return the most to your bottom line.
As for washers and dryers in the unit vs in-house laundry. In my market, that is worth about $100 more in rent per month to have the w/d in the unit. The value to the property depends on the class of tenant that the property attracts. A and B and upper C tenants have the money to pay extra for rent and not to have to share laundry facilities. You should do a market analysis to determine what is best in your market. The cost of water and the machines may be more than offset by increased revenue. If the units support the individual washers and dryers. I also rent them out for $30 per month per pair for extra revenue. If the setup is for a stacked unit then I've been unable to rent them out separately.
Thanks for the great feedback. This definitely has me considering just buying my own units and going that route.
Is there a rule of thumb for roughly how much a family would spend on laundry each month? That might help me get a sense for how much money I would be leaving on the table if I went with the agreement with WASH.
This particular area seems to be a bit on the poorer side. I am not sure how much different the rent amounts would be if I had in unit washers and dryers.
I would not go with the rented units! I have one property that we have rented units and the owner tells me that she barely gets enough to pay the water and electric bills for the laundry room. I have another property with coin op units that I take care of, it's a little 6-plex occupied by all single people and it generates about $25-$35 every 2 weeks.
I'm not sure I really understand the property but if you have a laundry room (profit center) and you're paying the tenants water bill, why would you even consider putting laundry in the units?
We have removed the laundry rooms from all our smaller properties in favour of en suite laundry. With the machines in the units, we command a higher rent; we use high efficiency machines so our water situation has not really changed (overall it has gone down, but we have made other improvements to the buildings; vandalism to the machines has gone down; the machines themselves are cheaper; and we are not paying the electricity or hot water.
In my area people will pay more for their own laundry in the unit.
We are a college town as well so a lot of those students will rent a house together with the intent of splitting costs, but also to have private laundry. its harder to study in a laundry mat, then your own bedroom will you laundry is going in the other room.
My personal opinion is, the more convenient those things are to the tenant, the longer they stay, and the lower your vacancy.
As a renter in the Boston area, I agree with those that say in-unit washer and dryer commands higher rent. I haven't heard of someone with in-unit "pay-per-use" though. Some mind find it cheap, but I would find it more difficult to argue higher rent.
One thing I would find annoying is someone coming every 2 months to my house to take the quarters out of the machine. Maybe you can install a pre-paid card system to avoid that. Then you have one central card machine where tenants can put money on their card and then they can return to their homes to use their own washer and dryers.
@Paul Brockmann not sure if you are referring about my post when mentioning about collecting quarters out of the machines. That is not what I meant. I rent the regular machines at a flat rate so quarters to get. I do this instead of just providing the machine. The extra revenue covers the cost and hassle of maintaining the machine.
@Mark Vieira this is not a guessing/estimating game. Do a rent survey in your area and see what the difference is between units with in the unit laundry and those with shared laundry. It is a fairly simple process. Remember it's not just about rents it's also about length of stay. The largest expense to most landlords is vacancy so items that reduce turnover reduce costs.