a large kitchen with stainless steel appliances

What Characteristics Make a Good Laundromat?

September 23, 2021

Before entering any new venture, smart investors consider its potential profitability. The easiest way for you to analyze if a company can generate a healthy return is to review its average return on investment (ROI). ROI percentages indicate whether a business generates a profit for its investors, and smart companies that thrive in the long run monitor their ROI closely. So, as a potential investor, the most important question is, how much money can I make owning a laundromat?

Typically, experts advise investors in small companies to look for an ROI between 15 and 30 percent. According to the Coin Laundry Association, laundries generate $5 billion annually, but just like any business, the profitability of each laundromat can depend on a range of variables.

Investors in successful laundromats have the potential to experience large returns. How much profit they realize depends on the choices each makes, such as the laundromat's location, size, efficiency, operating expenses, and the services they offer. Additionally, laundromats are scalable and future expansion or multiple-store ownership can also be achieved. However, on average you can expect to gain from 30% to 40% return on your investment.

Laundromats also offer opportunities for investors to utilize certain business tax advantages including Section 179 and bonus depreciation. Simply put, these methods allow certain businesses to take immediate deductions for business expenses related to depreciable assets such as laundry equipment, helping them to lower their current-year tax liability with a larger initial expense deduction, rather than depreciating it over time in future tax years.

In addition to the immediate advantages of a healthy, stable income along with great tax opportunities, there can be a significant long-term value from investing in a laundromat. Laundromats with proven track records are sold with relative ease and at top dollar. If you've run a profitable laundry and five years later decide to sell, you may expect to find a buyer quickly and, in most cases, your laundry will command a much higher price than you paid.

Furthermore, investing in a laundromat and saving for your retirement can be highly compatible. Even if you've been saving your whole life, it may not be enough to last you through retirement. In many cases, laundromats not only pay for themselves in just a few years but can leave you with a 'nest egg' that may be far better than a conventional savings account, IRA, 401k, money market, or mutual fund.

A laundromat from SLE can be a very rewarding experience. We have worked with many entrepreneurs like you and are your full-service laundromat source. We can guide you with such things as securing a location, lease, permits, and installation of the equipment, with you the customer making all the final decisions.

SLE reequips, develops, and constructs new and existing laundromats including brokerage of existing laundromats. Through this process, we have, leased, owned, and developed millions of square feet of retail properties.

Discover how we can provide you with the latest in premium, energy-efficient, laundry equipment, strategic sales support, flexible financing, and fast reliable service at www.statewidelaundry.com.