Washer/dryer rental business (credit card, lending, fees, loan)

[wheelsup]

Has anyone ever looked into or run a washer/dryer applicance rental business? I'm strictly looking at renting out on a monthly basis for say $30-$40/month, or whatever the market can bare.

I'm wondering about the ramifications of collecting. Let's say the renter doesn't pay, or moves and takes (steals) the units with them. How do I protect myself?

I was thinking about requiring a credit card or a deposit. But then that would rule out most people renting a washer and dryer. Thoughts?

Also anyone have any insight on insurance? I wouldn't want a dryer to catch on fire and burn the place down. But if it does I don't want to be held personally liable - I'm guessing a properly set up LLC could take care of that however?

[desertsun41]

I saw your post yesterday and had nothing to add. Then after coming home I saw several tire rental stores. I'm thinking how the hell can you rent tires? Then last night on a news piece they talked about all kinds of things are rent to own out there. In this economic depression very few people have any money to buy anything nor the credit any longer to charge it.

Go look into how those tire stores do it. Look into all those furniture stores who do rent to own.

Taking a depost cant work since those needing to rent have no money to buy. Taking a credit card cant work because those who cant afford to buy have no credit. Taking a depost cant work because if they had the money to give for a deposit then they would be able to practicly buy the appliance.

Your idea is worth pursuing but I hope you have a whole lot of your own money to do it because banks are not lending anymore. They make just about 90% of their income on risk free junk fees while giving up on their bread and butter risky loan making.

[wheelsup]

You don't need a lot of $$. Buy slightly used appliance sets for $200-$300 and rent for $30-$40/month. Also there is a large percentage of transient workers/students in my area that apparently prefer to rent.

I'm more worried about collecting the $$. I agree with your assessments on the credit card and deposit issues.

[desertsun41]

Originally Posted by wheelsup

You don't need a lot of $$. Buy slightly used appliance sets for $200-$300 and rent for $30-$40/month. Also there is a large percentage of transient workers/students in my area that apparently prefer to rent.

I'm more worried about collecting the $$. I agree with your assessments on the credit card and deposit issues.

$30 to 40 a month to rent a W&D???

One can go to the Laundramat for less then $5. Unless you make the whole business a rent to own format.

[wheelsup]

Yes, that is the standard price in my area. Actually, for pretty much every place I have ever lived in. I just bought a used set for $225. But believe it or not there are people who pay it.

http://www.city-data.com/forum/ralei...al-advice.html

Crazy, huh?

[Randomdude]

Originally Posted by wheelsup

Has anyone ever looked into or run a washer/dryer applicance rental business? I'm strictly looking at renting out on a monthly basis for say $30-$40/month, or whatever the market can bare.

I'm wondering about the ramifications of collecting. Let's say the renter doesn't pay, or moves and takes (steals) the units with them. How do I protect myself?

I was thinking about requiring a credit card or a deposit. But then that would rule out most people renting a washer and dryer. Thoughts?

Also anyone have any insight on insurance? I wouldn't want a dryer to catch on fire and burn the place down. But if it does I don't want to be held personally liable - I'm guessing a properly set up LLC could take care of that however?

1. This will work (there are dozens of rent to owns in any decent sized city), but it will not work for those prices. Nobody is going to pay about 1/6 of the price of a new washer to rent one. You are going to have to make it a price that is more appealing then going to a laundromat.

2. If someone doesnt pay, and you dont have a credit card, you will probably have a problem. That problem is, unlike a car repo, they have your appliances inside the house, which makes it hard to get them. I imagine you would have to get special court order to retrieve your property. If they steal it, then you can press charges, but there probably isnt a whole lot of chance your property will be recovered in working condition.

3. Do not underestimate the proliferation of credit cards. I work for a business that rents out mobile storage containers, and 80-85% of sales are on credit or debit cards. Almost nobody pays with cash outside of 7-Eleven. I would absolutely recommend having a credit card on file, even if they want to pay with cash on monthly basis. Many businesses do this already, hotels, car rental places, etc. You might cost yourself a small amount of business, but you will be better insured against theft and damages to your appliances.

[wheelsup]

Originally Posted by Randomdude

1. This will work (there are dozens of rent to owns in any decent sized city), but it will not work for those prices. Nobody is going to pay about 1/6 of the price of a new washer to rent one. You are going to have to make it a price that is more appealing then going to a laundromat.

I think they will, reference my link. That is the going rate for them. I'm just as surprised as you.

[Randomdude]

Originally Posted by wheelsup

I think they will, reference my link. That is the going rate for them. I'm just as surprised as you.

I imagine only very short term renters will rent your machines then for one or two months at a time.

If I were to set up a business like this, I would try to appeal to all renters and people with bad credit, by renting the units to them for a break even point of 2-3 years. This would probably be about $10-$15 a month per unit, which would also be highly competitive with using a laundromat.

[long101]

I think you might have something here. I use to rent a place that did not have a w/d and i had to walk to the laundrymat to do laundry. I only lived a block away from one and absouletly hated it. The time it took to walk back and forth, throw my stuff in a bag, and then wait for the stuff to be done... It really adds up you can really throw an ROI with that. If you live in a very urban area with a lot of renters this might have some great return.
If I had the means to do it (hookup, room to put it) I would of dropped 30ish a month for it. Its not only the people that are strapped for cash, but the people that it doesnt make sense to buy (renters, not going to be in there current place for a long time). It will require you to up front the cash to buy a bunch of sets, room to store them, a vehicle to transport them, help to move them, and a way to market them. Sounds like an easy way to make a couple bucks every month if you get it going.

[studiobtm]

I knew a guy that did this years ago and he made a killing. However, he taught himself to repair them so he would buy old units for nothing, fix them and then rent those. Ergo his costs were very low and if someone skipped on him he could easily take the loss.

I don't agree with RandomDude - people without money will spend lots of money stupidly. They will easily pay $30-40 a month. RandomDude is too smart to do that but is mistaken if he thinks everyone is that intelligent.

There are also some tricks to getting people to rent. I used to manage a music store and we did rent to own - it was how that chain made their money. For the first year 100% (minus some "fees" of course) goes toward the purchase. After that 50%. People would drag out rentals for years but keep them because eventually they would be owners. And then you have people like the guy that returned the $700 sax after shelling out over $2500 for it. I pointed out he only had $40 left to pay and that he should pay it off and then get $250 for it at the pawn shop. He didn't want to bother.

The rich ask how much. The poor ask how much - per month. It can be distasteful but as long as you are honest and don't pressure them it is their choice. In many cases it is their only choice so you do provide a valuable service.