Estimating Monthly income for Coin Laundry

[Adam Juodis]

I'm looking into a 4-plex that has a coin laundry room. I was analyzing the deal, and I was wondering how to estimate how much monthly income would a laundry room bring in for a 4-unit multifamily property. How do you guys estimate this?

[Patrick Liska]

Adam,

it all depends on gas rate, electric rate and how much is charged per load for wash and for the dryer. your best bet is to get any numbers you can from the seller ( maybe he claimed them on his tax forms ) only someone in your area may be able to give you a rough idea. my guess is about $800 for the year or $66/ month

[Charlie Price]

I have a 30 unit complex with 2 washers and 2 dryers. I purchased good used spew. Queen top loaders for $400 each. I bought a soap dispenser and a change maker for convince (another $800, but worth it for me.). I have almost exclusive efficiency units and most are single people, so less laundry then normal I guess. Mine are electric dryers. I charge $2.00 to wash and $1.50 to dry. I figure it costs about 1.00 +/- in utilities. One break down/service call per year at $300. I bring in anywhere from $200-$600 per month. I know a big range, not sure why, but those are my numbers. The $500 change maker is something I would advise to anyone having a small scale laundry. You also have to keep $120 or so of quarters in there. But you get to rotate your quarters and keep bills in your wallet, and not have to worry about rolling quarters all the time. Plus a big convenience for your tenants.

Hope that helps.

[Account Closed]

I have a 4-plex in NE Minneapolis that does about $75-85/month.  We are charging 1.75 each for a wash and dry.  The unit are 2- 2 bedrooms and 2- 1 bedroom to help with the breakdown.  We have had one service call in 2 year for $150.

We usually just take a bucket full of quarters once a year to the WellsFargo coin changing machine and put that towards a vacation hahah

[Adam Juodis]

@Patrick Liska

Seller says approx $1,000, but I'm not really trusting that number. Do you think 1 washer and 1 dryer is suffice for a 4plex, or do I need to add another unit of each?

[Account Closed]

@Adam Juodis $1000/year seems about correct, give or take $50-75.  I have never had a tenant at my 4-plex complain about 1 washer and dryer not being sufficient, for what its worth.

[Amber Gonion]

I usually figure $5/unit per week when it's not listed by the seller.

[Patrick Liska]

Adam,

I would do at least 2 of each. I have a student rental (8 students) and i have 2 commercial stack units and haven't heard any complaints.

[Thomas Gagnon]

I have a 14 unit with 2 washers and 2 dryers, about 25 tenants.  After metered expenses and I know because my laundry is metered separate I get about 390 a month or 250 net.  I have a company called mac-gray lease me the units.  They provide all repairs and provide insurance for any damage that is caused by them.  The machines can take both coin and credit cards.  I charge 2.75 a load and 1.75 to dry but the tenants can pick how many minutes up to 55 for that max charge of 1.75 on the dryers.  Credit card systems are great because tenants do more loads because they never have to stuff it to the ceiling because they are on their last roll of quarters.  Mac-gray charges $30 per unit per month so 120 and then the metered utilities after that nets me about 250 a month like I said earlier.  Units are front hold high efficiency speed queens worth about 2 grand a piece, dryers are propane.  

Leasing for 30 a unit a month with no maintenance costs ever and a free credit card system has been a no brainer for me.

[Patrick Liska]

Adam,

so to break down @Thomas Gagnon numbers for 4 people, with the service he is making $71/ month (250/14)x4.  and without the service about $111/ month ( for 4). as @Charlie Price mentioned, i would try and get a change machine in there, for convenience for the tenants and you can swap out the quarters from the machines to the bills in the change machine ( i did that exact thing for the same reasons at my student rental). i would also look into machines that take cards as well, mine are coin only but may be looking to see if i can add cards. Based on your answers that you have gotten so far, i would say you can figure anywhere from $65 to $90 / month, i would say a safe estimate is $75/ month when running your numbers.

[Jimmy Murray]

Adam Juodis one thought would be to back into it from a cap rate perspective...

$1,000 annually at a 10 cap would be $10k in value.

The other thing I would look at are rates for local laundromats. Typically we set our coin ops slightly below the area laundromats to entice our tenants to do laundry at the property.

Hope this helps!

[Thomas Gagnon]

great point @adam  

@Adam Juodis we based our rates slightly lower than local laundromats to entice the tenants to ensure the machines are not idle because of our monthly lease fee.  As for the breakdown above it's important when it comes to laundry to break my monthly costs down per tenant and not per rental unit.  I have roughly 24 tenants in that building with I'd say 18 using the machines regularly, some just like to get their laundry done in an hour or so with no use competition by going to the local laundromat.  That said it'd be 390 a month divided by 18 tenants times "# of tenants in your case" minus the utilities used.  Utilities I have seen on my end run about $20 per month for the roughly estimated 100 loads, "wash/dry" per month.

Honestly though, you can estimate and estimate but with laundry income it is highly dependent on your local utility rates, efficiency of your units, which if you are buying on your own and have older existing units, they use something 300% more utilities than what a system like mine uses.  But at the purchase price point of my leased units it'd take you years to recoup.  My rule of thumb is to use mac-gray and break even, I'll explain the contract later below.  If I make money lots of money on the larger buildings great, but more importantly it is a HUGE factor in obtaining great tenants.  Up here at least, where tenants in February would have to cart their laundry through a foot of snow to a laundromat just to wash some undies, or instead simply walk down stairs in their sweats in between commercials on a Saturday is paramount.  My rents are roughly 10% higher because of it which let's say for this building alone equates to over $1100 a month, which shadows the laundry income.   

I'd say get mac gray into your building with 1 unit each, plenty for a 4 unit and without the credit card machine it's like 25 per unit per month.  If you break even or make money, Great, if not you just provided a 10% increase ammenity which is the smart investor's move.  

Did I mention mac-gray comes every month to clean them and empty all the quarters and simply sends you a check each month, these guys are amazing.  

Potential for laundry income, guaranteed monthly rent increase, no maintenance fees, no repair fees, and you don't even collect the loot.  Zero effort with nothing but an upside, and I write into every mac gray contract that if the monthly fee on their end is not covered by the laundry income that they lower their monthly fee for that month to match, they've never said no.

Best of luck

[Charlie Price]

@Thomas Gagnon

I like the idea and business model with the leased machine concept. Just that I have a hard time leaving $$ on the table. If Mac Grey is doing that and making money then that's money you could be pocketing. Of course there is a time factor. For my situation $2K per machine would put me back $8K. Then there is probably a small monthly fee for setting up and paying the credit card deal which sounds gr8 also. At $120 per month It would take about 5.5 years to pay back the $8K and be i the clear. Then you have 5 year old machines as well! That doesn't factor in the time and/or $$ for break downs, regular servicing, monthly cleaning, collecting coins, etc...makes the leased machine look like a good deal over all. I'm going take another serious look into this for my units. Another option is that you could probably finance the machines at some small monthly rate over 5 years s or so. You would still have the time and service factor though. Thanks for the input. Cheers!

[Deanna McCormick]

We had 1 washer / 1 dryer for 12 units,, 4 buildings all the same.. worked was enough to handle what the residents needs.

Price just about even with the local laundromat.

For 120 units I would take 3600 to 4000 a month to the bank in quarters.. HEAVY.. then they went to card swipe new units..

POINT.. MAKE sure you regularly check the dryer vent hoses.. these will plug up faster than you realize and the better it runs the longer your dyer will last. 

[Gabriel Kind]

My hot take is that providing coin op laundry is penny wise but dollar dumb.

I don't think I've ever had a showing that didn't ask about laundry cost, and its one of the easiest ways to signal to tenants that you'll be extracting every dime from them that you can at the cost of their convenience and QoL. I can keep an good used old washer/dryer pair going in a multiplex for ~$200 a year so the cost is trivial. The laundry income would only be ~1% of my total NOI, the rest is rent margin.

We make money off RENT in this business but we make MARGINS off of having low vacancy higher prices, lower turnover, and minimizing damage (and that comes from good tenants and mutual respect). Be the full package so tenants pick you over a cheaper place every time. Prioritize their comfort and they’ll stay longer, and refer their friends when they leave

[Alecia Loveless]

@Adam Juodis Not sure why this old post is showing up now but I’ll respond. I have a 4 unit, two 2/1 and two 1/1 units. I have one coin op washer and one coin op dryer. They are $1.00 apiece so more of a gesture then a money maker. There is also a laundromat right across the street. Some tenants use mine, some go across the street. I average about $350 per year.