Common Area Laundry Rooms - problems or amenity?

Question

First, why did I post this blog in this forum?  Because gentle readers, a laundry vendor is a commercial tenant.   And the reason they are commercial tenants is because if you signed a contract, as it is called, it really is a "real property lease".

Commercial laundry vendors invest capital to purchase equipment, provide service, collect and process payments and for that they want to ensure their "real property leases" convey should the property flip.   They do not sign a "service" agreement or a "License" both of which can be cancelled.  As you know by now, a real property lease conveys with the land.

Similarly, I can't tell you how many times I got a call from a new owner saying "Your lease isn't valid because I didn't sign it."....my response was to gently ask them to show the lease to the counsel and ask them the same question.   It's valid and it conveys just like all those apartment leases from the individual units you acquire but did not sign.

Now, onto the challenge: Problems or Amenity?

Without a well written lease that spells out performance metrics, protects your payments in a timely fashion and ensures the lease doesn't automatically renew or have other onerous clauses the laundry room can be an amenity.

How?  Consider technology.  Today machines can be equipped with coin as well as digital payments like Apple Pay or Samsung Pay - it works off a Bluetooth connection and is a modestly priced upgrade to a laundry room.

Is the laundry room safe?  Is it well lit, clean, freshly painted and sanitary?  If not, you're likely not showing it to prospective residents.

If you have to compete with other properties that may have in unit connections, a laundry room that accepts digital payments, is clean, safe, well lit and with properly maintained equipment can attract and retain residents.

I welcome your comments, questions and remarks.  Thanks for reading!

Marcia Maynard · Answer

@Michael Calderaro   I see the coin-op laundry as an amenity we provide, but our business model is not based on that.  Our business is....

"We strive to provide safe, clean, affordable, comfortable, and quiet housing for responsible renters in the neighborhoods of West Vancouver."

I appreciate your post because it encourages me to think about why and how we provide this amenity.

Marcia Maynard · Answer

Our tenants prefer units with a washer/dryer in their own unit. This can be machines we provide and maintain, or hook-ups that allow tenants to use their own machines. Most people don't like sharing laundry equipment with other households. That said, our 8-plex was designed with a shared laundry on premises and it wouldn't be feasible to add washer/dryer hook-ups to individual units, so we have learned to take this on. Safe, clean, sanitary, affordable, available... that's what tenants want.  Quarters still work for us and our tenants. We own and maintain the machines. It's an amenity for the tenants, not a income stream for us. Luckily we break even.  We're in the landlording business, not the coin-op laundry business.

Patrick M. · Answer

I love my coin-ops. Since setting it up in June I have only been there collecting coins and the regular cleaning. I am very happy with Speed Queen.

I was a little on the fence about coin- but it is a non-issue for my tenants and that saves me the hassle of installing an internet connection ( another point of failure) and dealing with credit card companies (who are once again raising fees).

I had a couple of reasons for pulling out the en suites on turnover. I remain amazed that the prior owner didn't suffer a fire do to the lint behind the dryers and in the vents.

For this self-managing landlord it is a no brainer.

Michael Calderaro · Answer

Thanks for your comments, Marcia.  I appreciate the feedback.  You understand the importance of a clean, safe affordable amenity.   Your last sentence threw me off a bit because you really are in the coin op laundry business since you own, operate, maintain the machines, collect and process the money.  And it sounds like all is good, so Kudos!  I applaud you!

Max T. · Answer

I recently acquired a 2-unit that was set up with a common laundry room. I never received the keys to the coin op speed queen machines (built in the mid 80's) but I took a gamble and spent about $250 to get new coin boxes installed and the prices changed to $2/load.

I don't envision these machines to make money. There are only 3-4 adults living in the building. But for them it is better than going to a laundromat. And for me it pays the building's water bill and common electric, thus improving the property's pro-forma.

Marcia Maynard · Answer

I already have peace of mind.  :-)  Small potatoes.... an 8-plex with occupancy of one or two people per unit.  One washer and one dryer.  $1 per load for each, best bargain in town.  We collect the coins out of the machines once a month and take them straight to the bank. The machines came with the property when we bought it in 2005 and they are all mechanical, no electronic parts. We have a great appliance repair company that will come whenever there's a problem. I'm told the machines are easy to work on, rarely need service, and worth keeping since they are work horses.  The vent from the dryer to the outside exhaust is only 2.5 feet, easy to clean. Never had a clothes claim. Only changed the price once and saw how it was done; coin slots are simple. We have insurance too. One of our tenants keeps the laundry room tidy and clean for $30/month. Our tenants get along with each other fairly well and stagger their use of the laundry, so rarely is there a conflict. But thanks for the info. If we ever have a large complex with a large laundry room operation, I'd consider outsourcing.

Michael Calderaro · Answer

@Marcia Maynard  Thanks for the post Marcia, I love your mission statement, it's one of the more simple, yet powerful, ones I've seen.

So, if I may, let me ask have you considered both the pros and cons of a laundry vendor that would allow you to focus on the mission statement and relieve you of the burden of the capital investment, operation, service, collection, processing the money, vent cleaning, clothes claims, price changes, jammed machines, etc., etc?

There are two or three vendors in your neck of the woods who, given the chance, would recapitalize your laundry room, take over the collections, add insurance for PD & PL and overall increase your peace of mind.  I'm happy to discuss offline if you'd want to - no charge!    PS  I don't work for any of them!

Common Area Laundry Rooms - problems or amenity?

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