by John Cottrell
“My utility bills are too high!” We often have customers who call us with this concern. It is surprising for them to find the laundry equipment accounts for significantly LESS in utility cost than they initially think.
Before we get into reviewing the many ways having coin-operated laundry equipment can benefit a property, let me “flow” a few fun water facts your way:
- Once evaporated, a water molecule spends 10 days in the air.
- A typical garden hose can deliver 50 gallons of water in just 5 minutes.
- It takes about 1,000 gallons of water to grow the wheat to make a 2-pound loaf of bread, and 120 gallons to produce 1 egg.
- It would take 1.1 trillion gallons of water to cover one square mile with one foot of water.
There are many ways that laundry rooms at your properties are an asset, outside of the money they bring in. Laundry rooms are an amenity. Like a swimming pool or trees that you have planted at your property, the laundry facilities make your complex more attractive to current and prospective residents. Like the swimming pool, the laundry rooms can help you keep the residents contented and reluctant to look elsewhere for housing. Neither the trees, nor the pool generate hard income like the washers and dryers, but without them, your property would be less desirable and less profitable. With the laundry rooms, you get an amenity that pays for itself and helps you make more money at the same time.
The word “profitable” is one of the main words that most apartment owners have on their minds when researching what improvements they will invest in at their properties. Yet, many feel that having a laundry company service their facilities is, at best, a “break even” proposition. On a Route –Service plan, the laundry company will install energy-efficient machines with no cost to you. They will also provide service on the machines free of charge, and pay you a percentage of the income generated. (Often times, laundry room upgrades such as paint, tile flooring, lighting, etc. can also be provided at no cost to the apartment owner.)
Let’s run some numbers to justify our findings… a customer in Los Angeles County sent us his utility bills to see how much water the washers were using each month. The property details are as follows:
- 32 units 3 washers & 3 dryers
- .75¢ wash / .75¢ dry
- $360 gross income per month (50% goes to the owner)
- 240 wash cycles per month
- 240 dry cycles per month
Top load washers use 32-38 gallons of water per cycle. At 240 wash cycles, and using a high figure of 38 gallons per cycle, the washers would use 9,120 gallons. (Our washers at the property are energy-efficient and actually use only 32.5 gallons per load.)
There are 748 gallons in 100 cubic feet of water… therefore, this translates to a little over 12 HCFs (also known as “billing units” on some utility bills). Since it was a 2-month bill, we will double the number and call it 24 billing units. The owner was surprised to see that his bill was for a total usage of 417 billing units, and the washers equate to only 6% of the entire bill!
We also took the utility costs directly from his bill for gas and electricity, plugged them into a computer program designed to calculate true utility costs, and were able to show the owner that the 50% commission received on a monthly basis covered his utility expenses and produced a profit. The total expenses (gas, electric, water, and sewer) from the washers and dryers came out to be approximately $118.00 per month in this case study. The owner receives $180.00 per month.
This means that the owner’s share of the income more than covers his utilities. It essentially makes the laundry facilities more than an amenity that pays for itself… it makes it a Profit Center too. With energy-efficient machines, like the one we have at the property, an even higher profit is made.
We then discussed the next way we could provide assistance to the apartment owner. Rather than advising him to install a 100,000 gallon drum on the property and collect water from El Nino, or the standard “low-flow toilets and shower heads advice,” we offered the following water saving tips:
- Advise the residents not to fall asleep in the shower. An extra 5 minutes could mean another 50 gallons down the drain.
- Keep drinking water in the refrigerator. This helps stop the wasteful practice of running the tap water to cool water.
- Check the toilets for leaks. A leak in the toilet may waste up to 100 gallons per day. To check, put a little food coloring in the toilet tank. If, without flushing, the coloring begins to appear in the bowl, you have a leak.
One experience has shown that after many detailed Utility Analysis Reports nearly all owners realize a new understanding of what effect the washers and dryers have on both their utility costs as well as their bottom line. Please feel free to contact me for a free Utility Analysis Report for the laundry facilities at your multi-family property.
One last Trivia Tidbit for the healthy thinkers out there… You can refill an 8 oz. Glass of water approximately 15,000 times for the same cost as a six pack of soda… and, water has no caffeine or sugar!
1 This Article was featured in San Fernando Apartment Management, The Official California Apartment Journal, The Apartment Owner Magazine and Inside IREM-LA (Endnotes)1