What Is Laundry Income?
Laundry income comes from shared laundry rooms in apartment buildings and two-to-four-units with common areas. Owners install washers and dryers and either operate them directly (coin or card) or lease to a laundry vendor who splits revenue. Typical net laundry income is $50–$150 per unit per year for small multifamily. It’s ancillary income—adds to NOI without increasing operating expenses proportionally. Value-add multifamily strategies often include adding or upgrading laundry to capture laundry income.
Laundry income is revenue from shared laundry facilities in a multifamily property—typically from coin-operated or card-operated washers and dryers in common areas—counted as ancillary income that adds to NOI.
At a Glance
- What it is: Revenue from shared laundry facilities in common areas
- Why it matters: Ancillary income that adds to NOI with minimal incremental cost
- Key detail: Typically $50–$150/unit/year net; varies by unit count and vendor split
- Related: Ancillary income, parking income, NOI, operating expenses, common areas
- Watch for: Vendor splits can reduce net; equipment maintenance is part of operating expenses
How It Works
Structure. Owner-owned: you buy and maintain machines, collect coins or card payments. Vendor-leased: a laundry company installs and maintains equipment, shares revenue (often 50–60% to owner). Vendor-leased reduces your capital and maintenance but lowers your share.
Revenue and cost. Gross revenue depends on unit count, machine count, and usage. Net = gross minus vendor split (if applicable) and any direct costs (maintenance, card processing). Laundry income is typically ancillary income with high margin—minimal incremental operating expenses.
NOI impact. Laundry income flows to NOI. At a 5.5% cap rate, $2,000/year in laundry income adds about $36,000 to value. It’s a common value-add lever.
Real-World Example
Parkview Apartments, 16 units. The owner had a shared laundry room with 4 washers and 4 dryers. He leased to a laundry vendor—60/40 split (owner 60%). Gross revenue was $6,400/year; his net laundry income was $3,840. The vendor handled maintenance and repairs. Operating expenses for the laundry room (lighting, cleaning) were $400/year—already in common areas budget. Net laundry income added $3,440 to NOI. At 5.5% cap, that was $62,500 in value. The laundry income helped offset common areas cost.
Pros & Cons
- Ancillary income with high margin
- Adds to NOI and value
- Vendor option reduces capital and maintenance
- Revenue varies by usage; not guaranteed
- Vendor split reduces net; owner-operated requires maintenance
- Small buildings may have limited laundry income potential
Watch Out
- Vendor terms: Review vendor split and contract length. 50–60% to owner is typical; less can make laundry income marginal.
- Underwriting: Don’t overstate laundry income in pro formas. Use actuals or conservative estimates.
- Equipment age: Old equipment may need replacement; factor into operating expenses or value-add budget.
Ask an Investor
The Takeaway
Laundry income is a standard ancillary income stream for multifamily. It adds to NOI with minimal incremental cost. Use actuals or conservative estimates in underwriting; value-add can include adding or upgrading laundry.