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Some facts to know about coin laundry:
1. There has not been an apartment or condominium built
in the past 20 years that did not feature in-unit laundry.
Nobody builds them because nobody wants to buy them.
2. Residents hate laundry rooms. This is a matter of
privacy, safety, sanitation and convenience. They
will pay your competitor $50 to $100 MORE per month
just to have in-unit laundry.
3. This constitutes both an operating loss and lost resale
value. The cap rate in apartments is generally a multiple
of gross rents. Condominiums use a different approach to market
valuation but the net loss ($5,000 to $10,000 per unit) is
very similar.
4. After the owner(s) pay for utilities, cleaning, general
maintenance, and overhead the actual net income per home is
marginal at best. Apartments loose an additional
$50 to $100 per month in diminished rent and another $20 to
$50 in direct turnover cost. Even with zero vacancies,
turnover kills profit.
5. Vendor contracts constitute local monopolies. Most
have reasonable service and adequate equipment. However,
they are overpriced, unresponsive to changing consumer demand
and mired in obsolete technology.
6. Vendors survive because there is a disconnect between direct
income and actual costs. The area’s worst service
provider will still generate good income while generating
10% turnover for the owner.
7. Residents view the cost of laundry as part of the rent.
The more they pay the vendor, the less they can pay the owner.
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40 YEARS AGO...
This meant installing coin laundry and negotiating large bonus payments.
Those were the days of double declining depreciation where tax benefits
exceeded profits. Properties were held for seven years and
then rolled to generate new tax shelters, which were sold for a
profit. There was more than one deal where the laundry vendor
had more money invested than the General Partner did. This
world ended with the Tax Reform Act of 1986.
BUT THE WORLD MOVED ON
By 1986 the market had already changed. In the late 70’s
developers began installing in-unit laundry. In-unit
laundry generated five times more income than coin laundry and you
could assign the utility costs. Sharing a washer slowly became
as low-class as sharing a bathroom had 100 years earlier.
THE NEW MARKETING CHALLENGE
How do you stay competitive in the market until you can convert from coin laundry
to in-unit laundry?
Creative Laundry offers a variety of answers!
Coin Laundry Programs
We generally recommend that all owners purchase their own equipment.
The primary reason is control. Coin laundry has too great
an impact to simply assign to an outside firm for the next five
to ten years.
| Combination |
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This program combines in-unit equipment like
the LG for personal items along with over-sized equipment like
the Maytag Neptune in a central facility for bulky items and
volume. |
| Free |
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Include laundry as part of the rent/condominium
fee. The income is the same only the method of payment
has changed. > Coin Laundry fees as part of the rent. |
| Amenity |
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Modernize the facilities and add features that make the facility
as pleasant to visit as the lobby, the pool, the community
room, etc. > Coin Laundry as an amenity.
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| Income |
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There are locations where the owners want to keep the traditional
coin-op or coin laundry system with market rate coinage. The can choose
coin, token, or card based systems with the following options:
- Lease the laundry room to us
- Lease the laundry equipment from us
- Purchase your own equipment with a maintenance/management
contract
> Coin Laundry Equipment
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Before & After Pictures of
our Laundry room Rennovation Projects available!
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