Is it worth it to own the laundry equipment at my multi-unit property?
THE PROS
Obviously, it will mean more cash. Instead of working out a split with a leasing company, the money all goes to you. This will be a positive every month. It will also add to the building’s GROSS SCHEDULED INCOME should you decide to refinance or sell. It can be difficult to track income with some of the providers of laundry equipment, but when you own, you just tally the quarters. Another advantage is that you can change your price when desired. Want to raise the washer or dryer fifty cents a load? No problem.
THE CONS
Well, there are several here. When you own the equipment, you own it. I had a building several years ago where we had just purchased new equipment and a day or so later, somebody used a slug with a rubber band (to get the slug back) and the whole thing got jammed, causing an expensive repair. Tenants can be tough on machines and when you own, the repair bills are yours. There is also the time involved to collect the quarters. Not a lot of time, but it is required. Most providers do offer card-operated machines to avoid the quarters completely.
WHAT ARE YOU DOING NOW?
I had a client who had a very good arrangement with a provider on his buildings (he had hundreds of units, but quite a lot of buildings) He decided to install his own equipment and is still doing it. He says the difference in income is about, 3 times what he was getting.
Although it may be tempting to add a couple of hundred dollars or more to your monthly bottom line, it involves some cash upfront and expenditure of time. I have done both and tend to prefer owning, but you have to consider your time constraints and the location of your buildings. The cost of gas may eat up your profits if you have to drive a long way.
What we at PRS PROPERTIES CAN DO. We can discuss with you the current rents in your area and supply you with comparable rental prices for similar properties. Before you hire a manager, make sure the compensation is fair to you! We can also look at your building for changes that might allow you to get a higher value in order to create value without huge expenses for your building. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.
We always have many investors who are looking for “as-is” properties and are willing to purchase with low rents, a moratorium, or even with a problem tenant in place. We have put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are in 1031 exchanges and need to identify a replacement property before their 45-day identification period runs out.
Should you decide to put your property on the market, we will put together an aggressive, targeted, and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.
Remember – KNOWLEDGE IS POWER!
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