Generating Profit in Laundry Rooms

High efficiency, coin-free machines are smart choices for multi-housing owners and operators.

Energy savings and water efficiency remain at the forefront of the laundry management business—and with good reason. The benefits for the multi-housing industry go far beyond the promotion of a “green” company image. By selecting today’s water-efficient laundry equipment, multi-housing owners and operators can conserve water and energy, reduce utility expenses and increase customer satisfaction.

“In the housing industry it’s been said that if you’re not building green right now, you’re not building,” says Dick Ruel, national sales manager, Commercial Laundry for the Maytag and Whirlpool brands. “The laundry industry is seeing a similar trend as multi-housing owners and operators are looking for value, not just the lowest price.”

The benefits of high-efficiency washers include:

■ Water savings, adding up to thousands of dollars over the term of a laundry service contract;

■ A high-speed water extraction process, with more water removed from the final spin, resulting in lower gas or electric bills;

■ Up to 50 percent less wastewater running into sewer systems, reducing treatment costs and the demands on overloaded systems;

■ A one-third reduction in hot-water use and the energy required to heat it;

■ Cleaner clothes, with the option of using high-efficiency detergents that leave fewer residues on clothing and in wastewater;

■ Front-loading machines that can hold more laundry due to the lack of an agitator in the middle of the drum; and

■ Larger laundry loads that are finished faster, keeping the supply of clean laundry moving.

All of these benefits make for happier residents, and most are willing to pay a small premium for more efficient laundry services.

“It makes more financial sense to operate high-efficiency (HE) washing machines,” says Sheff Halsey, executive vice president of marketing for Mac-Gray. “We haven’t seen HE mandated yet, but it is probably getting reviewed in some local jurisdictions. We already have restrictions on the number of laundromats in certain areas.”

Developers meet ‘green’ standards

With the exception of the Mid-Atlantic region and Washington, D.C., all of Post Properties’ communities feature common area laundry facilities, with high-efficiency washers managed by Mac-Gray.

“The standard for most laundry providers today is to be as green as possible,” says Steve Sadler, vice president, strategic business services, for Post Properties in Atlanta. “The price of [HE] units will continue to decrease. At some point, you won’t be able to buy a non-energy-efficient machine.”

Like most large developers and operators, about 20 percent of Post’s communities offer in-unit laundry spaces with stackable machines for studios and full-size, top loaders for larger apartments. “It’s a decision we make in the construction phase for regional areas that traditionally demand in-unit laundries,” says Sadler.

The company then designs the common laundry room based on the number of in-unit washer and dryer hook-ups. Residents can also hook up their own laundry machines or rent the equipment. “For in-unit applications, we still provide standard top loaders,” says Sadler. “At lower volumes, the [high-efficiency] machines are more expensive to buy and to maintain.”

Mac-Gray’s Halsey agrees that the initial cost and maintenance of high-efficiency washers are higher than standard machines. “It costs us more to provide that service, but we feel it’s a better overall business decision for our clients. For one thing, residents will use those machines more often.”

On the manufacturing side, Ruel insists that his products’ “Built-to-Last” features guarantee dependable washers that require limited service repairs. “There is no change of life expectancy for energy-efficient laundry equipment,” he says.

However, user training and preventative maintenance are important parts of keeping costs down, according to Dave Drake, vice president
of ASI Campus Laundry Solutions, Dayton,
Ohio. ASI services more than 350 college and student accounts and is a subsidiary of Coinmach Service Corp.

ASI’s preventive maintenance schedule is rigorous, indeed. “Students don’t call for service, but our Proactive service schedule ensures we’re there to fix anything before it becomes a problem,” says Drake.

Since the late 1990s, more than 95 percent of the washers ASI installs are high-efficiency, front-loading units. In addition, older models continue to be upgraded as improvements come along.

“HE washers are not necessarily more expensive to maintain when people learn to use them properly,” says Drake. “We have a training program with the schools and resident advisors to make everyone aware of the [energy] savings and how to use them properly. We believe that saving water, when possible, should be a priority with the efforts and sustainability programs actively being pursued at all colleges and universities.”

Moving away from coin-operated machines

Because of the hassles that come with coin-operated laundry machines, multi-housing facilities have been moving toward card payment systems since the mid-1990s.

“Most savvy property managers can make more money from a card system,” says Halsey. “Any large regional property, managed by a knowledgeable business person, will prefer the card, unless the building is smaller or they plan to sell it.”

Mac-Gray also finds more clients are willing to switch from a coin- to a card-operated laundry. If so, the company runs open houses when “smart” cards or high-efficiency washers are put in place.

“The laundry room is a money-maker for the property owner,” says Halsey. “But owners and managers need to understand the principles of vending management. We find that smaller, more frequent price increases are much easier to institute on a card system, rather than jumping the price up a quarter or more at a time.”

In fact, the only facilities Halsey sees not making a profit are those that have allowed their laundries to deteriorate or are pricing their vends higher than the local laundromat.

Currently, Drake estimates that 40 percent to 50 percent of ASI’s student laundries are card-operated. The company makes it even easier on some students by providing washers and dryers that work for “free.” Students are charged up-front as part of their university housing bill.

When asked why the concept of pre-billing hasn’t caught on in other multifamily segments, Drake stressed the need for security to prevent non-residents from using the laundry machines in the “free” mode.

As a laundry service provider, Mac-Gray prefers a card payment system and is working on providing more affordable options for smaller multifamily dwellings.

“The high-efficiency washers and card systems will cost more up-front, so these options won’t make sense for small laundry facilities or property owners looking to sell their buildings,” says Halsey. “On the other hand, we continue to do laundry room retrofits that include new paint, ceilings and floors for larger customers under a long-term contract that is profitable for everyone.”

Designing the ‘perfect’ laundry room

Another good resource for owners and operators is the Multi-housing Laundry Association (MLA) in Raleigh, N.C. The association is a strong proponent of community area laundry rooms. Its Website, www.mla-online.com, features a variety of studies showing why common areas make more sense than in-unit laundries based on water savings, lower costs for residents, and more.

MLA’s Website also includes links to HUD (U.S. Department of Housing and Urban Development) studies that clearly show there are more opportunities for water and energy conservation in common area laundries than in in-unit multifamily designs. Visitors can also access MLA’s Laundry Utilities Cost Worksheet to help analyze common laundry room utility costs.

The association also offers guidance on designing a common area laundry room that is appealing to residents. Its findings include:

■ Convenience is key. MLA recommends common area laundries be located near main traffic areas within several hundred feet of any one unit. This may mean several smaller rooms, which may not work for all multifamily housing developments.

■ Make it safe, and keep it clean. Most multifamily owners and operators require card key access to common areas, like pools, gyms and laundry rooms. Lined trash cans encourage resident participation in keeping rooms clean, and outside laundry service providers should keep the machines clean and functioning properly.

■ Add more machines and newer technology. Next to a dirty laundry room, there’s nothing worse than making your residents wait more than a few minutes for a machine. Add new washers and dryers as needed, while upgrading their technology and educating residents on their use.

■ Enhance the social element. Laundry rooms are used by residents more often than the leasing rooms or lounge areas. Add more seating, wide-screen TVs and vending options to give the room a sense of community.

Other design considerations at the construction or remodeling stage include locating the laundry room near elevators or stairs and making sure the inside of the room is visible from the corridor. Glass walls, clear panels and doors can eliminate “screened” areas in the laundry room.

“Many of Post’s laundry rooms are adjacent to pools or fitness centers,” says Sadler. “We tend to congregate the common area facilities by design.”

Vending needs will vary from property to property. Typically, apartments don’t get as much use—or profit—out of their vending machines as those located inside student housing. However, the washing machines in both of these segments get a good workout each and every day.

To comment on this story, e-mail dmosher@multi-housingnews.com