Key Questions to Ask Before Investing in a Laundromat: 10 Must-Know Tips for Smart Buyers

Purchasing a laundromat is a significant investment, and making the right decision requires careful planning. At Turns, we work closely with laundromat owners nationwide, providing us with invaluable insights into the industry's daily operations, challenges, and opportunities. With our experience, we understand the unique hurdles laundromat owners face, such as managing equipment, controlling utility costs, and maintaining customer loyalty. Our mission is to help future laundromat owners make smart, informed choices that lead to long-term success.

If you're considering purchasing a laundromat, asking the right questions is critical to avoid potential pitfalls and maximize growth opportunities. In this blog, we’ve outlined 10 essential questions to guide you through the decision-making process, whether you're a first-time buyer or looking to expand your business.

10 Essential Questions to Ask Before Purchasing a Laundromat

1. What is the current financial performance of the business?

The first step is to evaluate the laundromat’s financial health by reviewing its revenue, operating expenses, and profits. A thriving laundromat can generate between $33,000 and $110,000 in annual income, depending on its location and size. To get a clear picture, examine profit-and-loss statements, tax returns, and other financial documents.

A significant part of assessing a laundromat’s financial status includes understanding its recurring costs. Utility bills—often the largest expense—usually range between $2,200 and $4,400 per month. As for the overall investment, the cost of purchasing a laundromat can vary widely, typically falling between $220,000 and $550,000, covering equipment, renovations, and leases.

For those wondering, “how much does it cost to run a laundromat?” the monthly operating expenses generally range from $5,500 to $16,500, depending on the number of machines, energy efficiency, and location. By factoring in additional revenue from services like wash-and-fold or vending machines, you can better estimate your return on investment (ROI) and potential earnings.

2. What is the condition and age of the equipment, and what are the maintenance costs?

The condition of the laundromat’s equipment is key to controlling operating costs and maintaining customer satisfaction. Older machines tend to break down more often, increasing repair costs and downtime. Newer, energy-efficient machines (typically under 10 years old) can significantly lower utility bills and require fewer repairs.

A well-maintained commercial washing machine has a lifespan of around 11–16 years. Maintenance costs can vary, but annual expenses for repairs can range from $550 to $5,500 per machine. When evaluating industrial laundry machines, make sure to assess their durability and repair history to estimate future maintenance costs.

If the laundromat uses coin-operated machines, ensure that the coin converters and other equipment are functioning properly. Whether you're using a coin washing machine or a card-based system, having a clear maintenance and replacement plan will help avoid costly surprises.

3. What are the lease terms, including rent, duration, and renewal options?

The profitability of a laundromat often hinges on its lease terms. A favorable lease typically includes affordable rent, a long-term agreement (5–10 years), and renewal options. Rent for laundromats typically falls between $2,200 and $6,600 per month, depending on the location.

When searching for a building for lease or a laundromat for rent near you, carefully review the lease terms to avoid potential issues like unexpected rent hikes or restrictions on equipment upgrades. Whether you're signing a coin laundry lease or any other agreement, a prime location with high foot traffic is essential for maximizing revenue.

4. Why is the current owner selling the business?

Understanding the seller’s motivation is essential when considering purchasing a laundromat. Common reasons for selling include retirement, relocation, or a shift in career focus. However, if the sale is due to declining revenue or increasing competition, it’s important to investigate further.

Don’t just focus on the purchase price when evaluating the cost of buying a laundromat—look at ongoing expenses such as utilities, equipment maintenance, and lease terms. Asking the right questions will help you decide if buying a laundromat is truly worth it in the long run.

5. What are the monthly utility costs for water, electricity, and gas?

Utility bills are one of the biggest ongoing costs for laundromats, often accounting for 20-30% of total expenses. The answer to "how much do utilities cost" depends on various factors, such as machine count, hours of operation, and energy efficiency. Typically, laundromats spend between $2,200 and $5,500 per month on water, electricity, and gas, making energy-efficient machines a valuable investment.

By addressing these questions before purchasing a laundromat, you can better understand the potential challenges and opportunities ahead, positioning your business for long-term success.

Source: Purchasing a Laundromat: 10 Essential Questions You Must Ask Before Investing