This is a sponsored post by Cents. Find out what Cents can do for your laundry business. All reviews and opinions expressed in this post are based on my personal view.
When you’re considering starting a new laundromat business, one of the first decisions you’ll have to make is whether to buy, build, or rent a location. Each option has its own set of pros and cons that you’ll need to weigh before making a decision. In this blog post, we will take a closer look at each option and help you decide which one is best for your unique situation.
Opening a new laundromat can be a lucrative business venture, but it’s important to make the right decision when it comes to choosing a location. Laundry owners run successful businesses using all three models. One of the benefits of the coin laundry industry is that there are a lot of different ways to run your business successfully, so you need to determine which model is best for you.
So, which option is best for you: buying, building, or renting? Let’s take a closer look at each one.
Option 1: Buying an Existing Laundromat
If you’re looking to have complete control over your laundromat business, buying a location may be the best option for you. When you own the property, you’ll be able to make changes and renovations as you see fit. You’ll also have the freedom to choose your hours of operation and manage your own staff. However, purchasing a property can be a costly investment, and you’ll be responsible for all maintenance and repairs.
Pros of Buying a Laundromat Location
Here are 5 pros to buying an existing coin laundry location:
1. Complete control over the business
When you buy an existing laundromat location, you have control over the look and feel of the entirety of the business. You’re not reliant on a landlord to make repairs for you and you’re not at the mercy of a landlord’s design tastes.
2. Freedom to make changes and renovations
Owning your laundromat location gives you the flexibility to design it exactly how you want it, exactly when you want to.
3. Freedom to choose hours of operation
Lease restrictions can sometimes limit the hours of operation of your business. If you decide that the location would perform better by being open 24-hours, owning the real estate gives you the freedom to leave your laundromat open.
4. Cost-effective in the long run
If you’re looking to stay in the same location for many years, buying may be a more cost-effective option than leasing. When you buy a property, you’re investing in an asset that can appreciate over time. You benefit from a long-term loan, hopefully at a fixed rate, and over time that loan gets paid down and inflation makes it easier to pay the monthly loan payment on the property. Plus, you get to use your business to pay down your real estate asset!
5. More opportunities for expansion
When you buy a laundry business, you’re not just buying the building and the business that’s in it. You’re also buying the land that it sits on. This gives you more opportunities for expansion down the road if your business is successful. Controlling the space gives you flexibility with how you can use that space in the most beneficial way.
Cons of Buying a Laundromat Location
As with every investment, however, there are cons that go along with the pros. Here are 5 cons to buying your coin laundry location.
1. Costly investment
The biggest con of buying a laundromat location is the cost. The additional cost of buying the real estate property on top of the laundromat can increase the investment amount significantly. While there are attractive loan options for purchasing the real estate with the laundromat, you will still need to come up with a down payment.
2. Maintenance and repairs are your responsibility
When you buy a laundromat, you’re also buying the responsibility of maintaining and repairing the property. If something breaks, it’s up to you to fix it. This can be a costly repair, depending on what needs to be fixed. The maintenance costs are entirely your responsibility when you buy an existing laundry business and the property it occupies. Additionally, if there are any violations, you will be responsible for fixing them as well.
3. Limited control over the business
Even though you have more control when you buy a laundromat, there are still some things that you won’t be able to control. For example, if the previous owner didn’t keep up with the repairs, you may be inheriting a property that needs a lot of work. Additionally, the location may not be in the best area, which can impact your business.
4. Hours of operation are restricted
While you do have more control over the hours of operation when you buy a laundromat, there may still be some restrictions. If the previous owner had specific hours that they operated, those may still be in place. It may take a restructuring of the business to either add more hours of operation or limit the existing hours of operation. Additionally, if the location is not zoned for 24-hour operation, you will not be able to operate your business 24-hours.
5. Fewer opportunities for expansion
While you do own the land that the laundromat is on, you may not have as many opportunities for expansion. If the location is not zoned for commercial use, you may not be able to expand the business. If other small businesses on the property are already leasing the other units, it may be difficult to expand due to the lack of available space. You will likely be bound by the existing leases and the terms outlined in them. This will vary depending on specific locations.
Option 2: Building a Location
Building a laundromat from the ground up gives you the opportunity to create a space that is specifically designed to meet your needs. You’ll have complete control over the layout, design, and amenities of your business. However, constructing a building can be a lengthy and expensive process. And, like purchasing a property, you’ll be responsible for all maintenance and repairs once your business is up and running.
Pros of Building a Laundromat Location
1. You'll have complete control over the layout, design, and amenities of your business
When you build your laundromat from the ground up, you’ll be able to design it specifically for your needs. You’ll have control over the layout, flow, and design of the space. This includes choosing energy-efficient washers and dryers, eco-friendly detergents, and high-tech features like wireless charging stations and digital signage. You’ll also be able to design your laundry facility exactly how you want it, customized to the laundry service you will provide. If you decide to offer wash and fold services or a laundry pick-up and delivery service, you can incorporate the space you’ll need into your layout design. You can also place your washers and dryers ideally for your self-service customers. It is also easier to set your business up as either a coin-operated laundry or a card-operated laundromat since you’ll be building from scratch.
2. You can choose the perfect location for your business
One of the benefits of building your own laundromat is that you’ll be able to choose the right location for your business. You can buy a piece of land in a high-traffic area or build on an empty lot near your target market. Choosing the right location is critical since most people won’t travel very far to do their laundry and it is very difficult and expensive to move a laundry business. The most successful laundry owners have their laundromats in a convenient location with surrounding businesses that serve a similar demographic.
3. You can build to your specific needs
When you construct a building, you can build it specifically for your needs. For example, you can include a larger parking lot to accommodate customers, or add an outdoor seating area for those who want to wait for their laundry to finish. You can also determine the layout of the store place the washing machines and dryers exactly where you want them.
4. You'll have the opportunity to create a unique space
When you build your own laundromat, you’ll have the opportunity to create a unique space that reflects your brand. This can help you attract customers and stand out from the competition.
5. More opportunities for expansion
If you build your laundromat on a piece of land that you own, you’ll have more opportunities for expansion in the future. You can add on to the existing building or construct new buildings as your business grows.
Cons of Building a Laundromat Location
1. It can be a lengthy and expensive process
Constructing a building can take months, or even years, to complete. It’s important to factor in the time it will take to obtain the necessary permits, hire contractors, and complete the construction process. Timelines can easily stretch out to 12-18 months. The high startup costs of building laundromat businesses can be a barrier for many laundromat owners. Building laundromat businesses can also be expensive. In addition to the cost of the land, you’ll need to factor in the cost of materials, labor, permits, and inspections. You’ll have to add the necessary infrastructure like plumbing and electrical. And, you’ll also need to equip the laundry business with everything it might need, including commercial laundry equipment, coin or card payment systems, and any other equipment you’ll need, such as a water heating system like a boiler or tankless water heaters.
2. You may need to hire a professional designer or architect
Unless you have experience in construction, you’ll likely need to hire a professional architect or designer to help with the plans for your laundromat. This can add to the overall cost of the project.
3. You'll be responsible for all maintenance and repairs once your business is up and running
Once your laundromat is open for business, you’ll be responsible for all maintenance and repairs. This includes regular cleaning and upkeep of the facility, as well as emergency repairs like a broken washing machine or dryer.
4. You may need to buy additional insurance
When you own the property where your coin laundromat is you may need to buy additional insurance to protect your business. This can include property insurance, liability insurance, and workers’ compensation insurance.
5. More specialized and knowledgeable builders may be required to design your laundromat correctly
Building a laundromat requires specialized knowledge and experience. You’ll need to hire contractors who are familiar with the construction of commercial laundry facilities. Builders who are familiar with the nuances of coin laundry businesses can help you ensure you are building your laundromat the right way the first time.
Option 3: Renting a Location
If you’re looking for a more flexible option, renting a location may be the best choice for you. When you rent a space, you’ll have the ability to choose your lease term and make changes to the property as needed. You won’t be responsible for any major repairs or renovations, and you may have the option to sublet if you need to relocate. However, you will be subject to the rules and regulations set forth by your landlord. This is often the easiest way for a laundromat owner to buy their first laundromat.
Pros of Renting a Coin Laundry Location
1. Renting a location is more flexible than buying or building a laundromat business
When you rent a space, you’ll have the ability to choose your lease term and make changes to the interior of the property as needed. While you have the responsibility to fulfill your lease, you don’t have the obligation for the property. This opens up the potential pool of buyers for your laundromat if, or when, you decide to sell it.
Renting is often the easiest way for a laundromat owner to buy their first laundromat. It keeps things simple and allows the owner to invest less capital and to focus solely on the business.
2. You're not responsible for any major repairs or renovations of the property
When you’re renting a space, the landlord is responsible for any major repairs or renovations that need to be made. This can save you a significant amount of money over time, as commercial laundry businesses require a lot of upkeep. Even if your lease dictates that the laundry owner must pay part of the maintenance costs, it usually is still the responsibility of the property owner to oversee the maintenance and repairs.
3. You may have the option to sublet or assign the lease if you need to relocate or sell the business
If you need to relocate your laundromat for any reason, you may have the option to sublet your space. This can give you more flexibility than if you owned the property, as it can be difficult to sell a commercial laundry business. You can also assign the lease to another laundromat operator, laundry industry professional, or business partner if you decide to sell your business.
4. Regulations set forth by your landlord are followed
When you’re renting a space, you are subject to the rules and regulations set forth by your landlord. While this may seem like a negative, it can actually be a positive. It provides some stability for your business, as you know what to expect from the property owner. It can also help prevent any legal issues that could arise if you were to violate a city ordinance or state law.
The regulations set forth by your landlord are also followed by other tenants of the property. This helps maintain a clean, consistent look for the shopping center.
5. Cost-effective in the short-term
You’ll have fewer upfront costs when you rent your laundromat location. One of the benefits of renting a laundromat location is that you won’t need the extra capital to buy the property along with the laundromat or to build your laundromat from scratch. This makes it cheaper and faster to get started with your laundromat business.
Cons of Renting a Coin Laundry Location
1. You may be subject to unexpected rent increases
One of the risks of renting a location is that the landlord may increase your rent amount without warning. If your business is not doing well, this could put you in a difficult financial situation.
2. The landlord may decide to sell the property or change the use of the property
If the landlord decides to sell the property, you may be required to move your laundromat. This can be disruptive to your business and cause you to lose customers.
3. You may not have as much control over the property
When you’re renting a space, you usually won’t have as much control over the property as you would if you owned it. For example, you may not be able to make changes to the exterior of the building or add your own signage.
4. You may not be able to sublet the space
While some landlords allow their tenants to sublet their space, others do not. This means that if you need to move, you may not be able to find someone to take over your lease.
5. The property may not be in the best condition
If the property is old or in poor condition, it may need repairs or renovations. This can be costly and time-consuming.
6. You may have to follow strict regulations set forth by the landlord
As a tenant, you will be required to follow any rules and regulations set forth by the landlord. This can include things like hours of operation, noise levels, and the use of the common areas.
7. You may be required to sign a long-term lease
Landlords usually require their tenants to sign a long-term lease. This means that you will be committed to the space for a set period of time, usually at least five years.
8. You may not be able to get out of the lease early
If you need to move or close your business, you may not be able to get out of your lease. This can be costly and disruptive to your business.
9. The landlord may not allow you to make changes to the space
If you want to make changes to the space, you will need to get approval from the landlord. This can be difficult, especially if the landlord does not live in the same city or state.
10. You may not have as much privacy
When you’re renting a space, the landlord may have the right to enter the property at any time. This can be disruptive to your business and invade your privacy.
Buy, Build, or Rent Your Laundromat Location
No matter which option you choose, be sure to do your research and weigh all of your options before making a decision. By taking the time to consider all of your choices, you can ensure that you’ll find the best possible location for your new business. You can run a successful laundromat business whether you buy, build, or rent your laundromat location. So choose the option that best suits your business model and personal needs.
And to maximize your success in your laundromat business, check out the Cents business-in-a-box software to help you serve your community better!
Do you have any questions about choosing a location for your laundromat business?
