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Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
Landlords: Are You Taking Advantage of this Revenue Stream?
Leased laundry equipment is one of the easiest ways for a landlord to make money, according to Adam Coffey, President and CEO of Web Service Company in California. “All you have to do is sign a lease.”
The landlords keep the best share of the revenue: the difference between what the tenants pay, and the payment on the lease and service. Web offers repair service that can respond within a matter of hours. In addition, by leasing energy and water efficient machines, a landlord can generate more revenue:
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Offering lower energy bills attracts tenants and keeps rent competitive.
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Private repair service is more costly and not as timely.
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Cutting your energy usage can earn you energy rebates.
One reason that energy costs are so high in apartments (500% higher energy use, and 330% higher water use than common area laundry) is that landlords can’t always afford to buy energy efficient appliances – sometimes they have to buy the cheapest. If you have a lot of units, the resulting costs in energy, water and repairs climb considerably.
Leased machines are a better deal. “We buy the best efficiency machines in such high volumes - tens of thousands, that we get discounts you can’t even imagine,” Adam says.
The economics work all the way down whether you have hundreds of units or a duplex. Even one washer and one dryer can generate income and save energy and water.
Web’s Multifamily Laundry Systems offers flexibility through individual plans where landlords choose machines and service plans ‘a la carte’. A landlord who is more stretched can lease an older model machine which is still in excellent repair. Another landlord might want to spend his dime on priority service.
A Green Corporate Culture
What started as a proprietorship with fifty washers (no dryers back then) and a pickup truck caught on quickly, and soon this equipment leasing company provided 300,000 machines nationwide.
But having business spread out over thirteen states meant the service and sales people had to travel great distances. While the market was vast, this model didn’t make sense from an environmental standpoint. So Web’s management did something revolutionary – they decided to consolidate to high density areas in the West. “We had 120,000 washers leased just in the greater Los Angeles area alone. So we focused on those markets in California, Nevada, and Hawaii. Now our service techs only have to travel a few miles on any given day. This change not only cut our bottom line expenses while our profits increased, it allowed us to develop a culture of conservation.”
Putting Your Money Where Your Mouth Is
“Our own corporate culture reflects our commitment to conservation. We lead by example,” Adam says.
They don’t stop at supplying high-effi cient machines to landlords. Adam drove the company Prius until he moved closer to the office. Then, he handed it off to an employee who had a longer commute. The service fleet vehicles can run on ethanol. In addition, Web uses a state-of-the-art satellite GPS dispatch system that allows them to track each vehicle and assign service to the one closest to the area.
As a result, fuel expenses have gone down. “We just completed an $80,000 lighting upgrade. That will pay for itself in 18 months.” Incorporating energy and water conservation technologies saves the planet - and saves money as well.
Are your tenants washing away your energy savings? Click here to find out.
Learn more about cost savings on energy upgrades by visiting our Green Pages.
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[...] Leased laundry equipment is an excellent source of revenue for landlords. Click here to learn more. [...]
[...] to earn a little income and save on burdensome maintenance repairs. See how it works in Are You Taking Advantage of This Revenue Stream? Reap the Rewards of Proper Planning: 8. 1031 Exchange Fees. [...]