Can you believe I’m writing this? Mr. Hey-Think-Big talking about messy laundry roomlaundry room potential. But it is an easy way to make money with rental properties and I would be doing you a dis-service by not discussing it.

I guess I’m evolving! After taking a close look, I now believe you should chase auxiliary income AFTER you’ve cleaned your laundry room.

From the look of this picture, it’s clear that I haven’t been minding my business. I failed to realize this room is for my customers, not for my gear. No wonder my tenants are taking their business elsewhere.

My goal is to become the preferred place for my tenants to do laundry.

Laundry Rooms – Easy Step to Make Money with Rental Properties

So let me share what I’ve learned, and share my improvement plan as well:

Step 1 – Make Sure Your Machine Lease Is Correct

Companies that lease these machines are able to offer a variety of different profit sharing arrangements.  I use Coinmach, and they offer the following programs that are suited for various levels of size and profitability:

A. Maintenance Only

– The property owner buys the machine and pays Coinmach a monthly fee to maintain the machine but not to collect coins.

B. Commission Splits above Monthly Minimum

Coinmach handles maintenance, reimbursements, collections, and pays 95% commission AFTER the minimum is collected. This is the version I currently use. I get a commission after they deduct $20 per machine per month from the kitty.

C. Fixed Rate on Coinless

The property owner pays a company a set fee on their machines that aren’t coin operated. This may be an option if you think to increase tenant’s rents to include a set number of loads per week. Assuming no one abused the arrangement (maybe a card reader or keypad is used to verify authorization) this would be a profitable move for the landlord and an added convenience to the tenant.

Step 2 – Clean up and Repair

As the above pictures shows, I am the poster boy for what not to do. A laundry room should be set up to maximize profits and not used as the landlord’s storage shed. I’m going to immediately focus on making the room customer –centric.

make money with rental properties - declutter

Step 3 – De-clutter and Decorate

Orderliness makes people feel comfortable; clutter drives them away. Right now, I’m driving my customers to someone else’s laundromat. No wonder I’m only earning 40% of my potential.

Tiny spaces are easy to accessorize. A couple of clever accessories make a big impact.

I’ve always admired how some boutique cafes in San Francisco make a rich impression with tasteful themes. I’m sure I can come up with something cool.

Click HERE to see this room after I de-cluttered it.

Step 4 – Be a Little Better than the Competition

You wouldn’t know it by looking at my pictures, but I’m a huge proponent of competition. Laundromats typically have tables, chairs, and good lighting if they are smart. My room, although it’s small, needs those things as well.

What else should I add to give me an edge?

Step 5 – Personalize

There’s a growing internet trend of using smartphones and sensors to tell smart objects that you’re coming. You’ll soon see your name appear in billboards as you pass by. Playing off that theme, I could assign a locker or cubbie spaces to tenants.  At a minimum, I should add some mirrors so customers “see” themselves in the space.

How would you allow customers to personalize the room?

Step 6 – Overcome Objections

Everyone’s situation will be different, but some of my tenant’s objections are the lack of coin machines and not being able to do multiple loads at the same time.

I can address the coin issue with a keybox that holds coins. Tenants could PayPal me $10 and I could give them the combination.img_5350

But I ended up insisting that Coinmach install a card reader that accepts credit cards. That did the trick.

Well that’s it, six ideas to help you wring out more laundry room profit. I’m going to implement these steps in order, and report back on my success.

Check out 40 Ways to Increase the Net Income of Your Rental Properties for more ways to grow your NOI.