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I'm on the board of a co-op in upstate NY (yes, there are a few of us up here). For several decades, we've had one of those horrible laundry contracts (self-renewing, we pay all utilities, receive very small rent fee). The contract has expired and the board as well as shareholder/tenants want to see the laundry become a revenue stream rather than a constant expense for the building.
We have ten floors with a washer and dryer on each floor. Total units are around 130. The tenant/shareholders are mostly young professionals, some elderly, and no children.
We’re just starting our research and have seen the general literature on the web regarding energy efficient machines, “smart cards,” the ruling against "right of first refusal clauses," and the different ways to go: co-op owns machines, co-op has revenue-sharing lease with laundry company.
But what we really need is to hear from someone who’s been there and done it.
Does anyone -
1. Live in a co-op that is happy with its revenue stream from its laundry rooms? How'd you do it?
2. Have experience/opinions on owning vs. leasing of equipment? If you own, how are the machines serviced?
3. Have any experiences, good or bad, with laundry service providers?
We're eager to learn - but there are so few people up here to talk to!
Thanks in advance for your time
My Co-op has 111 units total in three buildings. We have two laundry rooms: one with 4 gas dryers; two front loaded, water recycling regular size and one front loading giant size, also water recycling. The other laundry room has twice the capacity. We use Service Master. They redid our laundry rooms (new paint, floor tile, tables and chairs) along with the new machines. We like their service. The machines we selected have had some acceptance problems. We have a seven year lease and use pay cards.
Since we opted for the water-recycling machines, we do use less water however from an acceptance perspective, your wash water is someone else’s rinse water. This concept may not work well in a multi-family complex. The standing water in the tank can get a little ‘funky’ and one needs to use chlorine bleach from time to time to sterilize the recycling tank (not well noted). However, not everyone uses bleach.
Also, the normal capacity machines do not have a clear port to see what the laundry is doing and since the door locks, one can not confirm that it is actually ‘washing”. I know this is a fine point however this has also led to some resistance (I guess some people like to watch).
There is a pre-wash and regular cycle. You have to add detergent 2x: once for the pre-wash and once for the regular wash. If you don’t know this trick (and it is not well posted), all of you detergent you put in the pre-wash gets extracted and none is left for the wash cycle – means less cleaning. If you wait and put detergent in for both cycles, they clean fine. Note: you can not put liquid detergent for both cycles in at the same time – the detergent access points are not designed that way. Also, the giant wash has a shorter cycle – not sure why. Detergent and bleach can stain the stainless steel surface on the giant washer – so avoid that if you can.
After four years or so, we have not made money yet. The acceptance problem is such that some people go down the street to do their laundry. We had one incident where a shareholder just had to remove their laundry from a locked machine before the cycle was complete resulting in a ruined door which had to be replaced and they we had to install a security camera system in each of the rooms. We also had to add sprinklers to the room.
I am not sure yet what we will do when the contract is up. Few people are happy with the current situation however few people are really upset.
Steve, you bring up a very good point about using recycled water for the washers. I hope we are not using that here, which might be okay for a family, but not for an apartment building. Since I wasn't on the Board when the laundry contract was written, I want to find out, and if we do recycle wash water, I won't use these machines again either. In-between washes, water does sit in the 'drawers' for detergent, so maybe it is!
The other good point you and other Board Talkers bring up is a service contract -- who is supposed to clean the machines? Most residents don't clean anything more than the dryers' lint filters, and they are flimsy at best.
As Lucy of Peanuts would say, "Aack!"
My coop in Manhattan switched from laundry-company-owned to our own machines 5 years ago. We have about 110 apartments, and we replaced all the laundry company's machines with new, low-water-use ones. We also added an extra machine, increasing the number from 6 to 7; all are located in the laundry room in our basement. Our new machines use plastic cards instead of quarters and, of course, we control what to charge for using the machines (I believe we reduced the price). The plastic cards are refilled by putting money into a sort of vending machine in the laundry room.
We had had one of those nasty leasing contracts that you described, and we had to go to court to get out of it, and even then, we ended up settling the case in court by letting the unwanted laundry company make the monthly pick-up of our laundry receipts and service our machines when we need it.
Our contract with this company is about to run out, and we're looking to get a new one. Our machines have been malfunctioning lately, and we're very unhappy with both the timing and the quality of the alleged repairs that the laundry company is making. I'm also unhappy with the delay in their forwarding the laundry receipts to us -- it can take 2 months sometimes.
We get only marginally more income from the owned machines than we used to get when the laundry company paid us a fixed "rent" for the use of our laundry room to place their machines in. We average about $15,000/year now and used to get about $10,000/year free and clear; however, we now have to pay about $3,400/year ($283/month) for the service contract, netting us only $11,600/year. Net income should have been higher, but unfortunately the service contract we got stuck with when we settled the case cost us about $100 more per month than the other company we wanted to replace it with. We hope to get a lower cost (and more reliable) company now.
Our machines cost us about $25,000. Given the small extra net income we've been earning from our own machines, we're nowhere near amortizing the cost of the machines, so financially we're not ahead yet.
However, until our machines recently started malfunctioning, people were happier with them than they had been with the laundry company's much older machines. And they really like the card system better than having to stockpile quarters to do the laundry.
P.S., a few shareholders have installed their own washers and dryers, with our permission (at least in some cases, where we knew about it beforehand).
You must shop around for different vendors and choose the best one that fits your needs, example, the one that will give you the most amount in rent every month, the one that takes a smaller % of the profit, the one that has a lower cut off amount to start leaving 90% of profit to your building, the one that guarantees a certain standard in service being this machines (echo friendly), carts, folding tables, baskets and maintanance of the laundry rooms etc.
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In our NYC co-op, when the laundry lease expired, I'm told the Board checked with different companies and chose a different company than who serviced our building for many years. That company agreed to renovate it with new floor tiles, new machines, and painted the walls, provided a new folding table and laundry baskets. We had to upgrade our electrical system to accommodate for the new machines (they added a dryer and front-loader)to bring it up to NYC's electrical code.
My recommendation is to see & research the machines the laundry company proposes to install. We lease the machines and they pay us rent monthly. The Board that made the switch decided to stay with a coin-operated system, but the laundry companies these days prefer the "smart card" because it costs them less (they don't have to send a driver to pick up coins). Because we have a large senior population in our building, the Board thought the coins would be easier for them.
Also, check the quality of the lint filters inside the dryers - ours our tearing already and they are fairly new.
Habitat Magazine had a good article on laundry room contracts - I suggest checking that out also in their archives. Good luck!
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