Rent/Own
Most coin laundry and card laundry owners rent the building or store front that they occupy. Some laundry owners already own a building and then choose to put in their own coin/card laundry. Some laundry owners feel that they need to own the building that they put their store into.
Each consideration has its advantages and disadvantages. When I owned my own coin laundries I chose to rent. One important reason as to why, was that there were no buildings available to purchase in the areas that I wanted to be in. Also, there would have been a significant extra outlay of cash to purchase a building which I was not willing to make. For most coin laundry and card laundry owners, the cost of purchasing the property as well as building and the coin/card laundry may take you over your budget that you may be willing or able to invest. Or, it may not take you over your budget, but the cost of land, construction, fees, and taxes, may make building ownership prohibitive.
If you are going to rent it is important to realize that rent is always going to increase and you are only going to be allowed a certain amount of time on your lease before the property reverts back to the landlord. The landlord at that time may or may not renew your lease. Usually, if you have been a good tenant, the landlord is happy to renew your lease, sometimes the landlord has other plans for the property that does not include your business. So, an acceptable lease period with options, is not only important to satisfy the finance company, but it also needs to satisfy your own long term requirements for the business. The cost of rent and “pass-throughs” or other expenses that you will be paying as rent during your lease is extremely important. Determining the estimated earning potential of your business, and the type of growth you should experience is going to dictate the amount of rent you are both willing and able to pay.
If your intention is to rent, ADL can assist you with your lease negotiations to assure you the best possible terms and conditions. We can work both with you and your attorney to set the rent structure as well as the terms and conditions of this most important document. Remember that you will live with this lease for a very long time. You usually have only one chance to make it right. Do not short cut the cornerstone of your business.
If you wish to purchase the building your initial investment will be greater than if you rented, but you will have control over the future expenses in regards to paying a fixed or slightly variable rate to your lender. Your tax advantages will be greater than if you rented and you will have complete control as to how you operate and make changes to your business. You will be able to use the business to increase your equity in the property, and there is always the extra pride of ownership and control. The downside to owning, is that you are responsible to pay for any added expense to upkeep of the property, insurance and the extra risk associated with the greater investment.
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