Owning the property can provide long-term stability but requires a substantial upfront investment. Leasing costs: Leasing is less capital-intensive upfront and can cost between $1,500 to $5,000 per month. However, this could be more expensive over time and offers less control over the property.
In-unit laundry commands a solid rent premium in my market. The premium has increased during COVID. I'd definitely favour buying over leasing even in a shared laundry room.
Answer: Monthly profits can vary widely based on the location, size, and operational efficiency of the laundromat. On average, smaller laundromats might earn between $1,500 to $5,000 in profit per month, while larger, well-established ones in prime locations might see profits of $10,000 to $30,000 or more per month.
The cost per load at a laundromat typically ranges between $2 and $4, depending on the location and amenities offered. In addition to this base rate, there are additional charges for using the dryer.
The cost of equipment required to start a laundromat varies from around $20K to as much as $500K or more. Initial startup costs can be quite significant for a seemingly 'set-and-forget' kind of operation. However, the lack of required labor once a startup is complete can outweigh the cost of starting a laundromat.
Entrepreneurs normally spend between $100K and $1 million to start a new laundromat or buy a laundry business for sale. Dave suggests that you should normally spend between two and five times revenue, but that you should base your business valuation on what it's worth to you.
A typical laundry load will be between 10 to 20 pounds, bringing the total cost per load to range from $15 to $30. If you live alone, you should expect to have at least one load of laundry a week, sometimes two – you can expect to pay about $60 to $120 per month.
High Return on Investment
The typical return on investment (ROI) for laundromats ranges from 20% to 30%. This far exceeds the average returns on other types of business ventures such a real estate (7-10%) and the financial sector (4.7% dividend yield).
Most laundromats operate with 40 to 100 machines, leading to potential equipment costs of $32,000 to $260,000 for new units. Maintenance and repair expenses are also essential to consider.
We talked to the Laundromat Millionaire, Dave Menz, who owns four laundromats and makes nearly $2 million annually. He even helps other business owners navigate the industry to get more customers, become a full-service laundromat, and outshine absentee owners.
Understanding laundromat value
U.S. Laundromats post impressive numbers with a 95% average success rate and 20 - 35% profit margins. But whether or not your laundromat can meet (or exceed) these industry standards depends on some important factors.
Ever wondered how the average laundromat, with its steady hum of washers and dryers, can generate enough revenue to spin profits on rinse and repeat? Think of it like this. In 2024 alone, the global laundromat industry is projected to hit a whopping $204.6 billion.
A coin-operated laundromat can be a profitable business, but there's also a high risk of it attracting thieves. You'll also need to keep cash on hand to provide customers with change for the washers and dryers.
According to Dave Menz, the average laundromat makes around $300K in revenue per year. Depending on the location, competition, number of machines, and additional services, a laundromat business may make more or less than this estimate.
Renting a Washer and Dryer from a Rental Service
One machine runs from $20 to $100 per month, and pairs or stacks range from $40 to $250 a month depending on the models. Older and simpler models tend to cost less while the latest smart-home washer/dryers naturally can cost quite a bit more.
Small businesses that involve website design, a subset of digital marketing, are among those that make the most sales and bring in the most profit. People learn about businesses on the internet more often than via other avenues, so finding clients and a steady income stream isn't as difficult.
For example, if you have 20 machines, used 50% of the time (18 hours a day) and at an average rate of $5.00 per wash (30min per wash), daily revenue is ~$1,080. Now, assuming your laundromat is open 7 days a week, monthly revenue is $32,400.
1 kg of laundry= 5 shirts or 1 shirt + 1 pant or 2 bath towels.
Keep in mind that monthly costs of running a laundromat range from approximately $5,700 to $17,800 and start-up costs of a laundromat can reach upwards of $159,500 to $728,000. It's important to know exactly where your financial investments are going.
Laundromats can be highly profitable, recession-resistant, and flexible businesses, making them highly attractive for entrepreneurs. However, as with any business investment, there are risks to owning a laundromat which potential investors should carefully consider before diving in.
1. High Success Rates. A recent Gallup poll found that 66% of potential entrepreneurs are held back by the fear of business failure. However, one study found that laundromats have an extremely high rate of success – approximately 95% of laundromats succeed over a five-year period.