Keeping your utility costs low and utilizing energy star equipment in your laundromat can help you stretch your profits even further. Yes, now I see how 40% or more cash returns every year is possible. So yes, what you describe is very normal. (We documented the purchase process in much more detail in our earlier blog posts.). But, exactly how much does a laundromat make in a year on average? As well how can I find out how much electricity water and gas are cpnsumed by each laundry seasion?
There is not an existing laundromat in my area so what’s your advice for a possible start up?
The landlord is my father and his partner. Your changer is more like a small bank in your store that allows customers to exchange bills for change. We just had the change machine in our new store destroyed by a couple thieves. Truthfully, the best folks to help you with planning are equipment distributors. If the loan is 10%, then a 30% return becomes a 20%, which is infinity in a way. A standard double-load front-loading washer can cost anywhere from $3k-5k, a typical top loader about $1k-2k, a four-load machine $4k-6k and a six-load machine $6k-8k. I am lucky. At present I haven’t secured any funding for this project so the realtor didn’t seem interested in going much further.
In fact, I’m hoping that our grand total by the time we cash out is closer to $600,000 from an initial $80,000 investment, after 5 years. I have read your blog and it is very insightful. Two bill validators is always better than one. Im starting at 0.
That is very standard in the beginning of the purchase process. I admit I haven’t read all of your blog, but…..In five years, $500,000 total return from $50,000??? Investments have the risk to reward ratio. I want a laundry mat, I like those numbers. Owners don’t like the idea of the financial specifics of their store just being freely passed around, and I don’t blame them. And you’re also correct that with a laundromat, since the machines are income-producing assets, they must be maintained and/or replaced over time. You can make a fortune by owning a laundromat business. There are attendants taking care of all the house keeping work, selling lottery, etc. As I heard it ringing on the other end, and battled between letting it continue to ring and hanging up, I kept telling myself…, “You’ll regret the things you didn’t do more than the things you did do. We used a purchase price of $105,000, with a down payment of 35%.
Buying the laundromat reminded me a lot of what I’ve heard about buying investment real estate; find a slightly distressed property in the right area from a motivated seller.
Hi, Thank you for this blog so helpful! [Spoiler alert: Our first store did so well, we bought a second one!
In one of the buildings is a laundromat. Hello Laura… Its seems like I just started reading this and just cant stop… I am looking to purchasing a laundry mat that has been closed down for years in my hometown… Hopefully less than 5k for existing building and land.. You’re not committing to much when you sign a Non-Disclosure Agreement (NDA). Valuation is based on net profits at the time of sale. It felt like the right time to change things up, but we had no idea what or how.
Lastly, if you can’t get a reduction in the rent, see if they will give you the first few months rent-free. How much does such an operation make, in 2019? Claiming the entire purchase of equipment as an expense in the current tax year lowers your tax bill quite nicely, but it also means that on paper, your business doesn’t look like it’s doing as well.
I forgot to include our upfront investment for our second store, which we purchased for $30k cash.
Then you have construction costs; to run the plumbing, gas lines, pour concrete bases, electrical, drywall, paint, bulkheads, folding tables, seating, equipment installation, floors, ceiling infrastructure, lighting, security systems, etc. Also once I talked with the landlord he told me that the laundromat was on a month to month and he’s was in the process of kicking him out do to him not keeping up on the business.
My smaller store always runs short of quarters (people use the changer but leave with quarters in their pocket). Shopping centers with many vacancies, that are quiet and have no anchor stores will be much more likely to work with you in regards to lowering the rent (or even offering free rent for a few months) than a bustling, anchored shopping center that knows it can easily fill a vacancy and charge premium rent. No hurt in asking. According to the Coin Laundry Association, the cash flow of laundromats is typically in the range of $15,000 and $300,000 per year. Does the 90k in operating expenses include paying someon the run it? So it’s $500,000+ in profit from an $80,000 initial investment. Is this how this works? You can certainly open a laundry with a smaller population, but it would need to be a very small store.