Washer/dryer hookups or coin op machines?

Question

Would Class C tenants prefer their own washer dryer hookups or coin operated machines?

I am re-doing the electrics for a run down 6 unit building. It currently has individual w/d hookups but they need upgrading. It would be cheaper to ditch the existing hookups and provide a single service. I'm not concerned about revenue from the coin ops as it would be negligible.

I'm not sure whether this type of tenant would prefer to provide their own washers and dryers, or pay a couple bucks each time they do laundry.

Gino Barbaro · Answer

@Nick L.

Go and check what the rest of your market is doing.  If this is an amenity that other owners offer, then you may be forced to add.  If they don't, then you may be able to charge a premium.

Offering a laundry room with machines is a great amenity for tenants, even though the revenue may be negligable.

Gino

Nick L. · Answer

@Chris Soignier @Michael Boyer

Great points. I should have said that the existing hookups are all in the basement, not in-unit.

If I provide separate hookups for each unit the tenants will have to bring their own machines. Even if I lease them, I don't want to drop a ton of money on new machines and have to constantly fix them. The revenue is just not enough to offset the hassle.

The more I think about it, the more I'm leaning to a single coin op. The income would pay for the water and electricity usage, and it would be simpler to maintain. I feel like most tenants in this category will not have their own machines, so having their own hookups would be more of a negative than a positive for them.

Thomas S. · Answer

With class C properties you do what is best for you as the owner.  What class C tenants want is irrelevant. They have few options other than to take what they get. If there is already a Laundromat in the neighbourhood, which this type of neighbourhood usually has, that is all they need.

Nick L. · Answer

Thanks all. I made my decision - going with coin op machines, managed by a service company with a revenue split. It's a lot less headache for me and I think tenants would prefer that over having to provide their own machines.

Nick L. · Answer

I would definitely get a managed laundry service for a coin op. My manager lives about 25 mins from the property, I'm not going to ask her to do that just to collect coins.

Roger Vi · Answer

@Nick L. Just read the part about everything being in the basement... I would still compare the cost of getting the set up done for 6 W/D but if they are sharing the room anyway, I would only supply 1-3 actual W/D instead of 4-6 W/D units.

And absolutely have a way to make this passive and as little headache as possible. Either have someone else operate the W/D room, have a handy maintenance guy ready, or make an enough additional rent income to replace the thing every time it breaks. The reason I would do 2 or 3 set ups is if one breaks you don't have to rush to fix it. This can usually turn a $200 repair bill into a $50 repair bill.

Hope this helps.

Roger Vi · Answer

How much different would the cost be to replace the existing W/D hookups VS provide single service? W/D are becoming more of a necessity and your building will be more valuable and desired in the future just by adding these hookups. You don't even need to connect W/D, but if you remove the option the value and desirability instantly goes down.

Regarding actually hooking up the W/D, I would do it in my area (B- C+ area I would say) ten times out of ten just to make it easier to get a renter and extra rent income. How much different are comparable units renting for with or without W/D? Can you put a monthly dollar amount on how much a renter is willing to pay for this amenity? Around here, I can get $50-150 more a month just by having W/D in unit.

I have an excellent used appliance store in my area that I depend on for all appliances. I go in and tell them I want a W/D set from the same name brand (usually Whirlpool) in a model that they currently sell at Lowes or Home Depot. The cheapest at Lowes/HD is around $1000 for both before tax. These guys always find me something for $360-400 and include a 1 year warranty. I had to use the 1 year warranty one time for a fridge and they came out and fixed the thing within 24 hours. Maybe you have a similar type of shop near you?

Jeff B. · Answer

a) provide hookups or b) outsource coin operated appliances to a service who will split proceeds 50/50.

if you provide them, you just bought another maintenance headache

Michael Boyer · Answer

Great question, Nick. I think they would prefer their own (mine do) but they also will rent a clean, affordably priced unit with a coin op  nearby (which may be easier to manage for the landlord)...

I have both (lower/middle tenants with coin op and with units inside) and from a landlord perspective, the w/d is a wear point..

Just looked at annual expenses at tax time, and just with a 4 plex, I have replaced 2 stacked units (only ones that fit, lucky me), delinted a couple of dryers, cleaned and replaced dryer vents (one still to replace), replaced a lid switch, etc... I would have preferred to have all these in a central, easily accessed coin op laundry rather than each unit (economy scale with them in one place)... With 6 units, maybe 2 washers and 2 dryers does the trick and not 6 (yes, they may not last as long with more use, or they might if you can easily service them and monitor abuse)... The coin op may pay its way, too, with 6 units!

With them in each unit, there is also some risk of hard to see leaks, overloaded/unbalanced washer (noise and rocking) disturbing others, seized up valves (lubricate these at turnover), and oh so much fun to schedule appliance maintenance/replacement with tenants and move in and out washers and dryers...

I won't even get into one I have had a couple of times-- tenant pulling out a w/d (even with many notices/notes to call me first) to get a  quarter or lost sock and in the process pulling out the dryer vent or even a washer supply hose which is an expensive mess if not caught quick (possible mischief with C crowd).... In one central area, you get an easy oversight, regular view, and can likely make appliance maintenance and monitoring easier. It is what I would do if I was in your position (I have an admitted self manager landlord bias).... but I think it could work either way...Best of luck

Chris Soignier · Answer

Another option is to offer to lease W/D's to residents - you s/b able to get enough to cover the payment and a good incremental profit, which will also increase the NOI/valuation.

Washer/dryer hookups or coin op machines?

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