Last year, someone raised a question on our landlord forums in an attempt to figure out is it worth it to invest in coin operated laundry machines for rental properties. Let me start by saying that I’ve never purchased one because I remember back to my college days when the machines were always breaking down — and my roommates would use slugs and pantyhose to get around paying. That is not to say that these machines are a bad investment, but I just never got over it. The price of being stubborn . . .
Avoid Putting Coin Operated Laundry Machines In Single Family Rental Properties
For single family units, I’d probably stay away from going with these machines. There is nothing that says cheap landlord more then a SFR with a coin-op laundry machine. Do I think you should avoid putting any kind of laundry machine in a single family? No – I just think a coin-op would be in bad taste (no one ever said I was lacking in my opinions!). I would allow my tenants to buy their own and have them installed, and if you’re looking for another option, you could always offer laundry on site and increase the rent to cover the cost.
They can be a Good Investment in Multi-Families
What about multi-family properties? It can definitely make sense financially to put coin-op machines in larger properties. The more time those machines are spent chugging away, the better you’re going to make off. The only question is whether you want to deal with the headache of the thing. With that in mind, consider that you can actually lease machines, and this looks to be the best of both worlds (see comments from rye below for more info).
In addition, you can make extra revenue from change machines and soap vending machines. They all help the bottom line!
Now that you’ve got my thoughts on the matter, I wanted to share a few ideas from some of our members:
I’ve read around that it is not worth it to invest in a machine unless you’re looking at a 4plus building. The only positives seem to be value-added bonus points to your tenants – saving them a trip to the laundromat. It doesn’t seem like an investment with a great return unless you’ve got enough units.
The washer broke down in my duplex, and I opted for a coin-op replacement, even though it cost twice as much ($600) as a non coin-op. Even with the added up-front cost, this one will have the opportunity to pay for itself, where the non coin-op wouldn’t.
If you want to lease the equipment ( like MacGray, CoinMach), they like the agreement with 50/50 split of revenue. Owner is responsible for space and utility (big expense). If utility expense is over 25% of total revenue then you have a problem. They are responsible for maintenance and collections. For obvious reasons they like long contracts up veto 5yrs.
You can certainly negotiate the agreement to increase the % of revenue in your favor. Also, make sure that washer/dryer have a counter. Otherwise there is no easy way to determine the exact revenue.
If you’re interested in adding some change to your monthly gross, check out the vending yellow pages for some good coin-op laundry resources.
What are your thoughts?