Whatever you’re doing… stop. We need to talk about something important.
Everyone does it. Some of us are ashamed by it. Some of us do it in private. Whatever way you do it, it’s essential to both you and those that rent from you. The greater point I’m making here is that planning to put coin-operated laundry into a rental unit is a good idea, but don’t do it with an unrealistic expectation of on the immediate return-on-investment. Before you delve into the double-barrelled goodness of laundry machines that run on spare change, consider a few things…
Coin-operated laundry machines are best suited for multi-family properties — as in technically a duplex or more — but in my view they’re really much better suited to 4 units or more. You’re not going to put one into a single family unit because that’s tacky (think about it for a second). That kind of tackiness can put tenants off. Would you raise your eyebrow a bit if you were looking at a single family unit and noticed that the landlord had a coin-operated washer and dryer IN the unit? It kind of gives a bit of a weird and cheap impression. Common laundry rooms are better — areas that can be accessed by multiple tenants, with a likelihood of heavy use, and ideally on a separate meter from the rest of the units (it’s easier to manage and observe the utility expense).
On-site laundry is a convenience for existing and future tenants, and should be considered a feature when marketing the property and when you’re considering investing in one. Laundry facilities count as one of the most popular amenities renters look for, so adding one to your property is generally considered a positive long-term investment. It makes marketing vacancies a little easier, increases the chances of finding the tenants you’re looking for, and adds appraisal value to your property (as a result of the added amenity and the added income).
With that said, there’s an ongoing cost associated with running them utility-wise, and they can obviously breakdown and require repair. It’s possible you might not see a positive cash flow vs. the monthly expense if only two or 4 people are using the machines. The utility costs could outweigh the revenue you have coming in. That’s why I suggest 4 units and above as there’s a higher likelihood you’ll have the laundry volume and revenue — which in turn increases the likelihood of a positive cashflow on the investment and improves the chances of recouping on the machines sooner. However, numbers aside, even if you don’t enjoy positive cashflow from a laundry room it’s still a good idea to have the facilities on-site.
One other thing – it doesn’t have to be coin operated laundry. There’s a variety of alternative laundry solutions that you could consider as a landlord as well, like card operated laundry machines.
Have you invested in a laundry room? Share your stories with us.