How to Value a Laundromat Investment (2024)

Table of Contents

Generally speaking, Laundromats are sold based on a multiple of cash flow, before debt service.

In California, Laundromats normally sell between 3.0 – 5.5 times yearly cash flow, or 36 – 66 times monthly cash flow.

Below are some factors that can affect Laundromat Values:

	Low Valuation	Medium Valuation	High Valuation
Condition Lease	The lease has 1 of the following issues that cannot be fixed: – It is short term – The rent is too expensive – The increases on the rental rate are unreasonable – The lease is un-assignable to a new tenant	In order for a laundry to have substantial value, the lease needs to have a reasonable stated rent for at least 10 years and the lease needs to be assignable to a buyer.	The lease has everything going for it: -Long term (Base term + options = at least 15 years) -The current rent is reasonable -The rental increases are fair -The lease is transferable to a new buyer -The options have stated rents
Age and Quality of Equipment	A store where a majority of the equipment is 15+ years old.	Laundromats with equipment less than 10 years old, or newer equipment mixed with well-maintained older equipment.	Well-maintained equipment that is 5 years or newer.
Area of Laundromat	Located in an undesirable location because of area is considered unsafe or because there are not a lot of Laundromat buyers located in the immediate area.	The Laundromat is located in a mainly safe neighborhood, located in a densely populated area near Laundromat investors.	The laundromat is somewhat insulated from new competition coming in the area. This may be because current rents in the local area have priced out new competition, or there are governmental restrictions that make new Laundromats very difficult or impossible to build.