Would you open a laundry room in apt. building? (fees, insurance, bankrupt)

[cazelais]

I asked in the renter's forum but maybe this is the better forum to ask
the question.

I have known my landlord for six years. We take care of his building and live in it as well of course. He has offered to pay the electricity and hot water if we were to open a laundry room in the basement. We are in Canada and the price for us would be 2,500 to 3,000 for one washer and dryer. Coin operated and including plumber's fees. We would provide the labor of fixing the room up but supplies are always paid by the landlord.

Should we move I also have a friend in the building that I trust that could take care of it for a small fee. Do you think this is worth doing?

Another bonus would be saving 50.00 per month I spend going to the local laundermats that are also a bother but not a big deal. Any ideas if this is worth doing/investing in?

[maf763]

How many people in the building? That will go a long way in determining whether this would be worthwhile. If you had 10 people pay $10 a month into them, you would recoup your investment in 2-2.5 years. If you had 20 people paying $20 a month, it would take less than a year.

[cazelais]

There are 25 units. Mostly single people. Three units have portable washing machines in their apts.

[studiobtm]

At first glance this looks like a pretty good opportunity to me.

[pghquest]

Originally Posted by studiobtm

At first glance this looks like a pretty good opportunity to me.

I agree, at first glance it looks pretty good, but I have several concerns which the op needs to think about

Originally Posted by cazelais

There are 25 units. Mostly single people. Three units have portable washing machines in their apts.

How many washers/dryers are needed for 25 units? I cant imagine 1 of each being adaquate, so look at other similar sized buildings and ask them how many they have. I might guess 3-4 of each are needed because no one rushes to do laundry. This brings the cost upwards of $10K. (I still think at $10K it could be a good deal, so lets continue)

Originally Posted by cazelais

I have known my landlord for six years. We take care of his building and live in it as well of course.

The initial conserns begins here.

The landlord offered to pay the utilities, but for how long? Under what terms? What happens if/when the landlord decides the water bill is higher than expected? I know, you are a friend of theirs, but that doesnt answer the question.

Who pays for repairs, or vandalism? You own the machines, you would be liable, but how long can you afford to do this if it happens 3-4 times, or to all of the machines at once?

What happens if the washing machines flood? Will the landlord, i.e. your friend hold you liable for repair costs?

If the building burns down, or the machines end up missing, will you be reinbursed for the losses?

What if the landlord sells the property, dies, or you get evicted? Nothing forces the new owner to keep the agreement in place, after you just renovated the room at your cost.

My questioning isnt to scare you out of doing this, it does sound like at initial viewing, it makes economic sense, the goal is to get you to think about the what ifs, and if you decide to do this, do it properly and consider it a business.

If you want to cut out the costs and risks, there are companies out there that will install washer/dryers and take care of the liabilities and the costs of installing them, and split the revenue 50/50. You could arrange some sort of deal to return all quarters with a red paint mark on them so you can get free laundry, and the building owner would cover their costs.

[HIF]

pgh raised lots of important questions that you should get answered and ideas to consider.

If you decide to do this, I suggest that you look into machines that accept plastic tokens instead of coins. We had one that took rectangular plastic tokens and didn't have to worry about them getting stolen. Even though it is very hard to break into the cash boxes, they can be damaged by trying and are an attractive nuisance, IMO. Folks could slip a check for X amount of tokens under your door and you could do the same with an envelope of tokens.

[harry chickpea]

If he pays the hot water and electricity, and you can get a contract to that effect in writing, jump on it! 90% of the expense is in energy costs. I would also call around to laundromats and suppliers to see if used equipment from bankrupt laundromats is available at lower prices. The key is maintenance and regular inspection, more than the age of the units. The rules would have to go up even before the equipment arrives. No dying, no fiberglass curtains or drapes, etc., etc.

[kinkytoes]

YES DO IT!
A coin-op in the building will be like printing money yourself. Good JOB! “There are 25 units. Mostly single people” WOW!

You are RIGHT about the number of machines, but I have TIPS:
1. Start out with just 4 machines and a change machine. See how it goes (quality of the machines, complaints from tenants etc). If you get COMMERCIAL machines and it's open 24 hours then you may not need any more machines at all!
2. Make RULES for the laundry room. Let users know what to do if someone leaves stuff in the machine. Let users know what to do if they lose money in a machine.
3. Consider ELECTRONIC access for the laundry room – Maybe a couple of hundred for a lock without keys. May be manual, battery or hard-wired, but you don’t have to worry about creating or replacing keys. Just tell tenants the access code!
4. Get a Change machine - I got mine from gumballs.com and it has worked GREAT for many years (knock on wood) But I do not use the "cleaner" with the machine. I think those products clog the machine with silicone or something. Even so I LOVE IT.
5. Get a SAFE - You will need it to store all your MONEY! I am so jealous that you have a pool of 25 potential laundry do-ers! You need to store the KEYS that you use to program the machines and take out the money as well.
6. Address Safety – Find out how many people should be in the room and get a fire/alarm and/or extinguisher if needed. Post the occupancy/rules for the room and get an automatic door closer for the room. Also, make sure you have adequate ventilation.
7. Find out about Laws/Taxes/Fees – If your building is inspected or you need insurance, these items may take a bite out of your profits. Try to discretely find out if any of this stuff is required in your area.

Let’s say you spend 5 grand, I guess you can make 400-500 a month in cold hard cash.