Are Laundromats Really Passive?

Question

The business world is filled with false preconceptions—and I’ve found the laundry business is no exception.

What first intrigued me about laundromats was how often they’re described as being “passive income.”
My reality looked a lot different.

Operating a laundromat felt far closer to running a small convenience store than a hands-off investment. Yes, there are ways to automate parts of the business—but work still showed up every day. Whether you’re the one doing it or paying someone else, the work exists.

I'm not saying this makes it a bad business. In fact, it can be a great one.

But it is very different from how it’s commonly portrayed.

Curious to hear what others have discovered—especially from those who’ve owned or seriously evaluated laundromats.

Henry Clark · Answer

OP they are a business and not a real estate deal.   My buddy who is very mechanical owned one.  Everything is wear and tear.  Either you fix most things or you have machines down.  Or you buy your way out with newer equipment.

Also a cash business.  He knew he was leaking money.  He automated to no cash except for the vending machines.  His revenue increased 25% immediately.  Then he fired his employees and replaced.

Chase C Henderson · Answer

Great Topic!!!So we recently fell into owning a laundromat when we closed on a off market deal. We were really after the real estate, but we ended up with a business as well. In our experience the answer short may it be is like most things is scale!So for us we learned that most insurance company won't ensure the laundromat without a employee present, they also wouldn't insure it for 24 hour operation even with an employee there. Other may have more success, but this is what we found. Meaning the business has three  options, you be there all hours its open, do enough business to justify having employees or go without insurance or risk a claim being denied. Obviously none of these are great for passive income investors. Add in that maintenance, cleaning and addressing customer issues (like machine eating change or vending machine stocking). It has been anything but passive.

That being said if you were in a high volume market or willing to find a solution to the insurance problem, we can 100% see this business being passive, as the work load isn't all that high, and contractor do exist to fix equipment, you just are gonna pay an arm and leg for them.

Just are experience and food for thought

Perrier Wells · Answer

Hi Chase

Thanks for the response!

You are correct, scale is everything. A busier store will require more oversight but a quiet location may have revenue issues. Everything is a trade off.

I also appreciate the insight you provided on a laundry owners "3 options", for us it was my wife who took on the brunt of the onsite attendance work. I worked heavy on the maintenance side of the business...and security of course!