I sure hope you’re not like me when it comes to your rental’s coin op laundry room. I’ve been so focused on discovering non-obvious income ideas that I neglected to see the full potential of my complex’s laundry mat.

My laundry room currently grosses $73.39 each month. But how much should it gross? Would it be worthwhile to invest in a renovation? I want to say “yes” and launch into a fun project, but I really should evaluate the profit potential first.

The best way I know to get a sober perspective on potential profit is to run Monte Carlo Simulations. I learned that lesson the hard way. Click HERE to learn how to create Monte Carlo Simulations.

I want you to be able to check your rental’s laundry room potential, so I’ll walk you through the steps:

Step 1: Write the equation.

Monthly Earnings = (Price/Load) * (Total Number of Loads/Week) * (4 Weeks/Month)

Step 2: Break out the variable.

- Price/Load: My tenants currently pay $3.25 to wash and dry a load of clothes.

- Total Number of Loads/Week: My tenants typically do zero or two loads per week. In Monte Carlos language, we want the computer to randomly assume 0, 1, or 2 values so we’ll write it like this => RandBetween(0,2). However, tenants that have children will likely do 1 to 4 loads each week. That would be written as RandBetween(1,4).

Step 3: Place those variable into a spreadsheet. For my eight unit building, the set up looks like this:

Monthly Earnings = ($3.25/load ) * ( Num Loads Apt 1 + Num Loads Apt 2 + …. Num Loads Apt 8) * (4 weeks/month)

Each tenant household does between zero and two loads each week, so I substitute in the RandBetween(0,2) function to represent this unpredictability. Then I totaled the random numbers to find the total number of loads per week. The spreadsheet set up looks like this:

Step 4: Create 100 simulations by copying the row 100 times. I only show five lines in the picture above.

Step 5: Evaluate the monthly gross by using MAX and MEDIAN functions.

**Max = $182** is the realistic maximum amount I should expect.

Now if I hadn’t used a Monte Carlo technique, I would have mistakenly guessed $208 ($3.25 x 16 x 4) was the max. I could have gotten burned by making a decisions based on an inflated value.

So here’s the lesson: If you hate loosing money, then run Monte Carlos.

**Median = $104** is the benchmark. I’m currently not earning this much, therefore something in my laundry facility needs correcting.

Step 6: Make a comparison. If I were earning the $104 per month, the median gross, that would mean I earned a C grade. But since I’m averaging $73.39 per month (and $91.88 at best), I’m earning an D grade. Clearly, I need to make some improvements.

## Is Your Laundry Room Profit Center Up to Snuff?

Modify the equations to match your complex’s washer and dryer prices, number of units, and number of loads/week. Find your own median and see how you compare.

Please leave a comment below and tell me what you find.