by Speed Queen Laundry Systems
last updated 23/06/2021
Better Than A Rental
by Speed Queen Laundry Systems
last updated 23/06/2021
Landlords turning to Speed Queen laundromats to provide good returns
The recent changes to the tax regime around rental properties have seen landlords look for other ways to realise a return on their investments. ‘Yes, property offers capital gain in the good years, but it can be quite high risk, and high maintenance too,’ says Royce Little. ‘That’s why it’s no surprise that we’ve seen more and more people turning to Speed Queen recently.
‘We have one client who was so pleased with his first laundromat he set up a second, and is now planning his third. He’s sold up all his rental properties and is looking for locations for three more laundromats. That might surprise some, but not us – we’ve proved again and again over the past five years that, set up properly, Speed Queen-equipped laundromats can offer a 20-30 percent return on investment. With cashless payment and remote operation, they can be a truly passive investment.’
Royce is head of laundromat sales for Speed Queen, the oldest and largest manufacturer of commercial laundry equipment in the world. ‘Despite being founded in 1908, we’ve always been at the cutting edge of technology and trends, and that’s why our operators continue to make big profits,’ he says.
‘Our modern laundromats offer technological advances that have been big game changers for the industry. By offering cashless payment and remote operation, laundromats have become even more attractive opportunities for owners as investors. And because you don’t need expensive high street or mall locations, Speed Queen’s partners are reaping the rewards of us being ahead of the game.
‘That’s why we say Speed Queen is a perfect model for anyone seeking passive income.’
Cashless means payment assured
‘From an investor’s perspective, cashless payments offer a lot of benefits,’ explains Royce. ‘For a start, with no cash on site there are no security issues. There are no worries about handling, collecting and banking coins, either. That was always a bit of a hassle – laws designed to prevent money laundering made dropping coins into banks increasingly difficult, but almost everyone has an eftpos card or a credit card these days, and Covid-19 only accelerated the trend towards cashless payments.
‘That’s why we developed our own sophisticated system for laundromats, which allows not just for cards but payWave and Apple Pay, too. You don’t need pockets full of heavy cash just to wash your clothes any more. And, for our investors, it means the payments go direct into their accounts with no risk of default – not like being a landlord!’
Speed Queen offers another massive benefit to prospective investors: remote operation. ‘This has revolutionised the way owners interact with their businesses – you can sit in Kerikeri and watch the profits flow in from Invercargill, if that’s your preference,’ says Royce.
‘Via the internet, you can have complete visibility of all the operations in your store from wherever you are: how many cycles each machine has done; when are the peaks and troughs of the operating cycle; and if there’s been a very rare fault or issue. If there is a blocked drain, for example, the machine will message you immediately to let you know.
‘Even if there is a fault, it’s not a problem at all – we have servicing agents in every town in the country. They rarely have a lot of work to do for Speed Queen, though, because our equipment is pretty indestructible – our machines will work reliably day after day for 15-20 years, on average.’
Speed Queen is not actually a franchise – you operate under your own brand, but Speed Queen provides all the help you need to get up and running. This covers everything from site selection according to proven demographic and parking criteria, to meeting council regulations and launching your business.
‘We carry out a full feasibility study on any site, looking at the demand and potential capacity of turnover versus fixed costs to ensure the right mix of equipment in the right place,’ says Royce. ‘By putting in bigger capacity machines, customers can do their whole week’s washing in an hour, and enjoy free wi-fi while they wait. It’s an approach that has proved incredibly reliable and has created a perfect passive investment opportunity.’
A medium-sized laundromat requires a total investment of $250-300,000, much of which can be financed. The deposit required is $75-100,000. ‘The return on the total investment is in the region of 20-30 percent, and we’ve had some owners do much better than that,’ says Royce.
‘This is a turn-key operation which suits investors looking for an alternative to property,’ Royce explains. ‘We want to hear from anyone who has the desire to build a successful business in any part of the country … and you don’t even need to move!
‘Whatever your situation, give me a call, and let’s discuss how Speed Queen can help you.’
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