Bought 5-Unit Apartment. Laundry equipment: To Lease Vs. Purchase

[Lokesh W.]

I purchased a 5-unit apartment building in Milwaukee, WI this week. I already put a property management company in place. Any suggestions for the new building owner (i.e. me)?

I want to put a coin/operated laundry in the building (including a new water heater for this laundry equipment). Would it be better own this equipment or lease it? I’ve heard that these coin/card operated laundry always problematic (fails every other month or so). If the equipment keeps failing, then it will be a nuisance to the tenants, Management Company and I to chase down the technician and wait them to fix it. So I thought about leasing it where the leasing company takes care of maintenance, repair and replacement of the equipment. But then, if I lease it, I have to pay a monthly fee as long as own this building.

I know that having an in-house laundry will make this building more rentable and convenient (especially in Wisconsin where winters are pretty rough) so I really want to put this equipment within the next month or so. Does leasing equipment still result income from laundry?

Does anyone (or anyone you know) have experience in either owning or leasing this equipment?

Please share your experience. Any suggestions are greatly appreciated!

[Kimberly T.]

We have personally bought the coin op machines we put in our apartment buildings. This is based on what we heard from my parents' experiences with leased laundry machines, which was: the lease company will never report the actual amount of money that gets cycled through your machines (it's in quarters, so you can't prove they're lying), the lease company will be next to impossible to contact when you decide you don't want to renew their lease (my parents played hell trying to get one company to accept the certified letter they sent stating they weren't renewing), and the list goes on (just can't remember the rest right now).

From what I've heard from my parents and others, laundry lease companies are about as trustworthy as used car salesmen.

Yes, machines will periodically break down and such, but so will the stove, plumbing, HVAC, and everything else you supply your tenants with. I don't see laundry equipment any differently. I'd much rather have the control over the machines. That said, there's nothing inherently wrong with leasing them, you just have to decide what's important to you.