Laundry Machines - Whats The Reality?
All,
So one of the things I see documented the most as a good way to improve cash flow at a multi-unit property is to install washers and dryers but I have never seen any real numbers quoted. So if anybody here has any experience in doing this I would love to hear from you; in particular the questions I have now are:
1) How many people do you tend to need in the property to make the washer/dryers pay off?
2) What kind of return do you get?
3) Best source to purchase the machines?
4) General cost for installation?
I am looking at 7-unit property with a bunch of 1br 1ba units with a downstairs retail area that could easily be a full laundromat as far as space goes.
We run a 96 unit building and after maintaining machines, managing costs, paying utilities, etc. we are about a net $0. I think this is great, because it is a service to the tenants, not a P/L center. As for "a good way to improve cash flow", I would say the biggest benefit would be better/increased occupancy. And for single family houses... we install W/D for $20/month more rent.
If you are talking about the downstairs becoming a "full laundromat" as in commercial laundromat, then disregard my above comments. This is a different business with different considerations.
I have a 125 space moble home park, which has anywhere from 30 to 100 people there. When we purchased the park, there was a contract already in place with a service- they provided the machines, they collect the money monthly, and we split it. We get anywhere from $300-$800 a month, and we pay the electric and propane to run the machines, which is not much. Then we have vending machines in there, which brings in another several hundred dollars a month.
There was a study done that one of my clients picked up ( he owns over 3,000 apartments) The study showed that on average, a tenant will do around 3.5 Loads of Laundry a week. Figure the math from there.
Depends on the area. If there is a high vacancy rate (like where I am), I would not give the tenant an incentive to jump ship.
I like to keep my rentals very slightly under market rents. I constantly watch the market and I keep up with it. I do also give consideration to my good tenants and keep their rents the same as long as I can.
Best way to raise rents, is to do it based on "CPI Adjustments" (Consumer Price Index" if you google it you will get a better handle on what it is, but its basically a yearly increase that the government comes up with.
If you increase based on CPI, and they complain and call you out on it, you can show them the actual increase as dictated by the government.