Laundromat Resource › Forums › Financing › Financing a renovation › Reply To: Financing a renovation
Hi Dahren,
I’ll take a shot at some of these questions for you.
Leasing Machines:
This generally doesn’t make sense for laundromat owners. It can make some sense for apartment owners who want to have machines in their buildings, but because the machines are the primary asset for a laundromat, it typically makes sense to own them. I do recommend financing them if the business supports that, however. Distributors, who you would buy the machines from, have connections with financing options who understand the laundromat business.
Painting the walls:
I’ve done that in the past. Whether you should or not depends. If you’re looking to renovate as cheaply as possible, it may make sense to do it yourself. However, if you have to close the business down to paint, then factor in the lost revenue. If a professional can get it done quicker it would be worth it to pay to have it done.
Update the carts:
When you start painting and putting in new machines, it starts to make the old parts of the business look even older. If you’re renovating the rest of the store, you should probably put in new carts, too.
Card system:
If the business can support the costs then I would consider it. However, they are typically very expensive to buy and install.
Renovation cost:
There are so many variables here it’s really impossible to say. The best thing to do would be to start getting quotes- new machines, paint, carts, card system, flooring, new bulkheads, etc.
One final thought, the income doesn’t really play a role in how much a laundromat costs other than you use it to find the net operating income (NOI) by subtracting the expenses from the income. The value of a laundromat is then determined by the NOI multiplied by the value multiplier (usually 3-4.5x).
Hope that helps some!
