Fresh new spin: The laundromat has had a glow up
In years gone by, heading to a laundromat with an armload of grubby clothes or – if you’re a business operator – a literal truckload of dirty linen, was about as much fun as watching paint dry in the rain.
But the tide has turned on this essential task, with many laundromats across the country enjoying a glow-up.
“Smart operators have transformed laundromats from dump-and-run spaces into cafes with washing machines,” says Scott O’Neill, a commercial property buyers’ agent and founder of the Rethink Group, a company that has been involved in the purchase of dozens of laundromats, often as part of a shopping centre or other multi-tenant transaction. “They’ve added co-working, food and actual atmosphere.”
From pastel-hued stores with pooch parking and book nooks to industrial-chic spaces with air-con and coffee machines, laundromat operators are looking to make laundry a little less ordinary.
O’Neill says that for investors, laundromats have gone from being dodgy tenants to legitimate anchors with strong covenants.
“Recession-proof cashflow in high-density areas makes them surprisingly attractive,” he says.
Throw in modern technology that helps to make laundromats semi-passive, with self-service, cashless payments and remote monitoring, and it’s easy to see why investors are taking time to tweak their offerings to best meet the market.
“One operator can manage multiple sites with just cleaners visiting daily,” O’Neill says.
New spin on laundry
Miguel Heredia is the general manager of Commercial Laundry Appliances (CLA), a company that supplies and services commercial laundry equipment nationwide.
He helps clients to get a laundromat up and running, from the first site check through to launch.
“Once they can confirm they have a suitable site, we would generally organise a site visit to see what requirements there would be,” he explains. It’s not as simple as four walls and access to water, and O’Neill advises the fitout cost will likely range between $200,000 and $500,000, depending on size, with an equipment lifespan of up to 10 years.
The CLA checklist includes making sure there’s room for ducting (the machines require ventilation and may also need a secondary lint filtration system), confirming whether the site can accommodate gas or electric machines (it’s cheaper to run natural-gas machines), liaising with a hydraulic engineer on plumbing requirements (tank size, water pressure, cooling pits), checking parking provisions and, where applicable, dealing with strata requirements.
CLA can also help with the floor plan and the crafting of an inviting design that will contribute to business success. Heredia says it’s about balancing functionality and comfort to keep customers coming back.
“Ideally, you want to provide a space where customers not only feel comfortable doing the laundry, but they can be doing some work, or using the free Wi-Fi, not just twiddling their thumbs,” he says.
Of course, even self-service laundromats require good property management to avoid costly problems.
“Insurance isn’t cheap,” O’Neill says. “Water damage, fire risk from dryers, and 24/7 liability exposure means two to four per cent of revenue goes to premiums. Equipment failure can cost $50,000 overnight. Underestimating utility costs can also destroy margins. Location and maintenance are everything.”
O’Neill advises investors to look for high-density, high-rental market locations that don’t rely on students, who may disappear for the summer break.
Tourist hotspots can prove profitable for laundromat operators, and it helps to have high foot traffic, easy parking and limited competition. Laundromats can be successful in both strip shopping and mall locations, especially with nearby complementary amenities like cafes and grocery shops so people can combine errands.
For property investors, laundromats are “solid B-grade tenants”, O’Neill says.
“But verify their financials thoroughly,” he adds. “Margins are tighter than they look once utilities hit. Location matters enormously. Equipment-heavy fit-outs mean they won’t leave easily, which is good for stability.”
And consider adding more amenities to your laundromat to keep customers happily occupied while they wait for their laundry.
Dirty clothes, clean fun
To celebrate the opening of his second N-Less Washing laundromat in Canberra earlier this year, Aaron Ravi partnered with local Dickson businesses Pattysmiths and Spilt Milk to dish up free burgers and gelato to customers. But even without these tasty incentives, there’s a good chance he would have seen a good turnout.
That’s because, along with the two dozen gleaming washers and dryers, the N-Less fitout offers free Wi-Fi, timber tables with comfy chairs, charging points for your phone, coffee and snack vending machines, massage chairs and, the cherry on top, an arcade games room.
“With the laundromats back in the old days, you felt that you might get mugged,” Ravi says. “They just didn’t feel welcoming. I wanted to change that concept and show that a laundromat can be inviting.”
Rather than just provide an essential service, he wanted to deliver an experience.
“You’ve got half an hour to an hour to kill anyway, so it’s good to have something to do while you wait,” Ravi says.
The feedback from customers has been overwhelmingly positive.
“Everybody loves it, and now we’re a finalist in the Canberra Region Local Business Awards,” Ravi says. “People say they can get their work done, have a game, relax, and the laundry doesn’t feel like a chore.”
