Profit, rinse, repeat: Laundromats re-emerge as lucrative investment opportunities

Laundromats are bouncing back as a lucrative business and investment opportunity following a challenging few years brought on by the Covid pandemic. 

According to IBISWorld data, solid growth in the food service, travel and tourism sectors will support laundromats, with industry revenue on track to grow an average 2.3% annually over the five years through 2028-29 to $2.6 billion.

A rise in dual-income households and busy lifestyles has also led to increased demand in the residential laundry sector.

Typically offering an entry-level asset with secure tenants on long-term leases, property investors have been quick to snap up quality sites on realcommercial.com.au.

Rags to riches? Laundromats are recovering from the Covid downturn. Picture: realcommercial.com.au/sold

But an unlikely source of attention has also pinpointed the humble laundromat industry as a hotspot for entrepreneurs and aspiring business owners, with social media ‘finfluencers’ touting laundromat businesses as a path to financial freedom.

So, is owning a laundromat really worth the hype?

“People will always need clean clothes. They also love convenience and anything that makes their life easier, which makes laundry services a non-discretionary spend,” Chris Hill, founder of self-service laundromat chain Spinzone told realcommercial.com.au.

Spinzone founder Chris Hill. Picture: Supplied

The business uses technology to improve machine efficiency and to identify areas to optimise profitability. Mr Hill said once correctly setup, laundromats can provide lucrative set-and-forget income streams.

“Unfortunately, a lot of people think starting a laundromat business is easy. They might be simple to set up, but they’re not easy to get right,” Mr Hill said.

“Too many people see an empty shop and think they can build a laundromat. And they can, but that doesn’t mean it will be profitable,” he said.

“Demographics and density are key components and a catchment report is a non-negotiable. Without it, you’re dead from the start. I can predict what you’ll earn simply from that report. Location isn’t just important, it’s everything.”

The rise of a laundromat empire

Ten years ago, Mr Hill was working as an IT manager for the Australian Government and had never considered he would one day he own a chain of laundromats.

“I wasn’t too happy with my job at the time and I was always a bit of an entrepreneur in the background trying new things alongside my day-to-day job. One day I finally caved to my desires and decided to build a laundromat,” he explained.

“This was despite all my friends, family and colleagues who were saying, ‘Don’t do it. Everyone’s got a washing machine at home, so why are you building a laundromat? It’s not going to work.’ Even the tradesmen building it were telling me it’s not going to work.”

After one-year of operation, his laundromat made more money than Chris earned at his full-time job.

“I thought I’d see how it went after five years, but in the first year I did the tax return and it earned more than me. So that was it. I jumped ship into the laundry business.”

Location, automation and technology is behind Spinzone’s success. Picture: Supplied

After a decade in the laundry game, Mr Hill established the Spinzone franchise in 2023. Two years later the business has 16 locations currently operating or under construction in NSW, ACT and Queensland.

Mr Hill said the advantage of modern laundromats is their ability to run as an unattended operation.

“That means no full-time staff wages – which can be a saving of up to 35% compared to other businesses – no complex rosters and no high turnover headaches.

“Your main recurring costs are utilities, which are variable based on usage, equipment servicing and lease payments. It’s a significant advantage over businesses with heavy labour costs or high inventory spoilage,” he explained.

He said location, quality equipment and realistic projections for utility and rent costs were critical for building a successful laundromat business.

“Location is everything – high visibility, easy access and strong local demand will dictate your returns more than anything else,” he said. “[Good equipment] lasts longer, runs more efficiently and builds your reputation. Ensure your fit-out is clean, modern and safe to attract repeat customers.

“A well-planned laundromat can be a set-and-forget income stream, but only if you structure it right from day one.”

Setup costs

Commercial and industrial laundry specialist, Richard Jay, notes setting up a laundromat from scratch requires an investment of anywhere between $100,000 and $400,000.

“Costs will vary depending on property size, rent, equipment capacity, number of machines, services offered and fit-out expenses,” noted Richard Jay sales executive, Kevin South.

While Chris Hill’s first laundromat set him back $164,000 on equipment, he managed to cut further costs by overseeing his own fit-out.

“I designed the layout myself and put in a lot of my own labour – painting, building the plaster walls, putting in the lights and prepping the floors with a grinder to save costs,” he explained.

Landlord considerations

Commercial property agent Glyn Bosisto sees laundromats as robust long leasing businesses for landlords, but says they have specific considerations that should be taken into account, such as producing expensive water bills.

“They may also require specialist drainage as an interceptor to filter water into the public system, and they typically require a commercial gas supply for dryers as electricity can be too expensive,” he explained.

This commercial property tenanted by a laundromat was sold last year for $835,000 on a yield of 5.1%. Picture: realcommercial.com.au/sold

Mr Bosisto said landlords should establish who owns all the plant and equipment as part of the lease.

“The lease should also provide for an agreement for the tenant to properly strip out and re-instate the property if the business should leave or the lease ends.

“Ensure the tenant pays the outgoings and that the rent does not include all the outgoings.”

Laundromat opportunities around the country

Whether looking to buy a laundromat business, or seeking the secure tenancy a laundromat offers to a commercial asset, there are several opportunities currently on the market.

Commercial laundromat in suburban Melbourne – Noble Park, VIC

Price guide: $500,000 – $550,000

Situated in a row of village shops alongside a popular Spanish bakery, this well-established laundromat at 48 Alfred Street offers proven business potential in the heart of Noble Park, a thriving community located 35 minutes southeast of Melbourne CBD.

For sale with a price guide of $500,000 – $550,000. Picture: realcommercial.com.au

The fully equipped business comes with modern washing machines and dryers, professional-grade fixtures, and an efficient layout designed for high customer throughput.

On-street parking is available directly in front, while the substantial rear yard provides additional space and potential for storage or operational expansion.

Fully tenanted arcade with solar-powered laundromat – Woodburn, NSW

Price guide: $520,000 – $570,000

Offering a fully-tenanted entry level asset with multiple income streams – including that of a solar-powered laundromat – is Woodburn Arcade, located at 111 River Street in the NSW town of Woodburn.

Positioned on a generous 474.3sqm block in the main street, the property offers a vibrant mix of long-term tenants which also include a popular Thai restaurant, boutique beachwear and giftware store, local community radio station and professional consulting room.

Property investors may consider this entry level arcade, which includes a laundromat among its tenants. Picture: realcommercial.com.au

Terry Brown of McGrath Lennox Head told realcommercial.com.au the arcade enjoys prime visibility in the heart of town, a picturesque outlook over the Richmond River, and generates an annual net income of $46,547, offering a return of approximately 8–9% for prospective buyers.

Mr Brown also noted the town of Woodburn as in the midst of a strong and inspiring resurgence.

“It’s attracting a new wave of energy, including young families, entrepreneurs, and community leaders who see the potential and charm of affordable living by the river,” he said.

Regional laundromat with multiple potential income streams – Pomona, QLD

Price guide: $950,000

Situated on one of Pomona’s busiest streets and walking distance to Pomona Central, this 1,012m2 block freehold property at 13 Factory Street includes a laundromat that services the local community.

The freehold property is located in the scenic town of Pomana in the Noosa Shire. Picture: realcommercial.com.au

The street-fronted laundromat includes machines in perfect working order and consistent income from repeat customers over several years, with a list of equipment available upon request.

The property also includes a commercial shed at the rear currently used for vehicle storage and leased periodically for $250 a week, and a two-bedroom residence currently leased for $350 a week.

A laundromat is one of the tenants. Picture: realcommercial.com.au

Cory Hoy of RWC Northern Corridor Group said it would suit an astute investor looking for multiple streams of income or an owner-occupier wanting extra income.

The property’s 2024 net income which includes the laundromat was approximately $47,000.