Laundry in 4 unit: coin vs free?

16 Replies

I want to put a laundry in the basement of my 4U as an amenity. I've done it "free"  in a 3U with success for the most part. In the "free model you build the cost into the rent. The upside of free is cheap machines, you can buy a basic low maintenance Whirlpool top loader for $100 on CL. Can make it cheaper to buy another than repair. Beside the maintenance of the machines the downside I'm worried about is in a 4U with 8-12 people in it folks might be casual about hogging the laundry with partial loads or the one unit of legacy "low functioning" tenants letting in their friends. 

The upside to coin-op is explicitly covering expenses and no wasting of resources. The downside is a considerably larger buy-in, like $1600 to $2400 for machines vs maybe $200 for non coin-op.That could take years to recover.  I'd consider the leasing companies since I'm not really looking at this as a moneymaker, the rent roll in the 4U is $5100, and someone else being responsible for maintenance is appealing. But I've heard some of them aren't interested 4U places. Any thoughts?

I think the coin-op machines are abused less. If you include use with their rent, they are likely to use them more which means they may wear out faster and your utility bills will be higher. On the other hand, you may make as good a return or better if it's included and you won't have to spend any time collecting coins and taking them to the bank.

If you want to leave no stone unturned and determine the feasibility of outsourcing your laundry room function to an on-site service provider, Google "laundry room service" and check out what might be available in your area. A long time ago, I was watching a small publicly-traded company in this space, but it got acquired and its shares are no longer available for purchase. I have no idea how many units in a multi-family building are required to make this kind of service practical.

We have removed coin-op laundry and common laundry rooms from all our properties of 6-units or less in favour of en-suite laundry.   Residential machines are about 1/2 the capital outlay; the tenant pays their own operating costs (electricity, hot water and, more frequently, water itself); we can charge higher rent for the convenience of en-suite laundry; and if the machines are abused, we know who is responsible.

Thanks all! @Roy N. en suite is not really practical, There would be a ton of plumbing to do.  plus there's the added risk of water leak and damage to consider. In my own home when I put laundry on the 2nd floor I basically had a shower pan with a drain built, and installed a leak detecting cutoff valve.

It really depends on your market. In a high class A area if provided free laundry machines is what is expected than that is what to go with. In lower class C areas coin op all the way. Just having laundry on site is a convenience.

Originally posted by @Mike Buckley :

It really depends on your market. In a high class A area if provided free laundry machines is what is expected than that is what to go with. In lower class C areas coin op all the way. Just having laundry on site is a convenience.

 I'm somewhere in between, in a gentrifying area. 3 of the 4 units are now college educated people I placed.  The basement studio is an issue, with a low functioning couple on SSI. They don't cause real problems, he helps out with garbage and shoveling, but they're not who I would choose.

Another option (which may not be cheaper) that I've seen is to have a separate washer/dryer for each unit in the basement, each with a key-operated switch.  Basically, each unit's water/electricity is tied to their washer/dryer, so they can use it as much as they want, but they are paying for the utilities.  The keys help ensure a neighbor doesn't use the wrong unit.

Of course this is washer/dryer cost * 4, but may be cheaper and easier than a coin op.

Originally posted by @Dick Rosen :

We have coin-ops in a 4-plex and gross about $30-$40 per month. We purchased cheaper units from Home Depot and they have been worry free for 2 years now. 

Huh, that sounds low. That's a long time to recover costs directly, after utility usage. It's unclear how much it adds to rents. How many people are living there and what's your fee per wash and dry?  I'm seeing about $850 per machine for the coin ops. At that price I'm leaning towards 'free' and seeing if there's problems.  I'm certainly not putting in 4 sets!

Originally posted by @Johann Jells :
Originally posted by @Dick Rosen:

We have coin-ops in a 4-plex and gross about $30-$40 per month. We purchased cheaper units from Home Depot and they have been worry free for 2 years now. 

Huh, that sounds low. That's a long time to recover costs directly, after utility usage. It's unclear how much it adds to rents. How many people are living there and what's your fee per wash and dry?  I'm seeing about $850 per machine for the coin ops. At that price I'm leaning towards 'free' and seeing if there's problems.  I'm certainly not putting in 4 sets!

Johann:

Between the higher capital costs for commercial coin-op machines, the operating expenses , and the space set-aside for a laundry room, we found that common, coin-op laundry does well to break even ... which is why we ignore laundry revenue when analysing an apartment building and why we found more benefit in moving to en-suite laundry in our smaller buildings (as mention above).      

I just bought 4 washers (2 working and 2 that were broken) all same make for $900 that were coin operated. That gives me two that are working and two I store for spare parts.

If I was you in your situation I would do coin operated. Look around for used ones. Sometimes apartment blocks have the machines on lease and send them back to the company. They're okay units that just have some wear on on them, many if you buy them by the supplier you can get some sort of 1 yr refurbished warranty as well. I'd just go with the coin op as a way to put the coins into an account that will pay for the next washer and dryer when those units break down. Otherwise the money has to come from your own pocket or an inflated rent.

I just had an interesting thought. I could save equipment cost by buying just the washer coin op and using a standard dryer. No one is going to bring in their wet clothes to use my free dryer! Those old Whirlpool gas dryers are pretty robust and I can probably get one for $50.