Bed And Breakfast Vs. Hotel
Traditional hotels are essentially rest stops for busy travelers to relax after a long day of sightseeing. Guests are usually attracted to B&Bs for their novelty or the experiences they offer.
Many B&Bs present guests with an opportunity to stay overnight in unique spaces, like converted firehouses, taverns, historic buildings, houseboats and even treehouses. The unusual lodging is usually an attraction guests want to explore throughout their stay.
That isn’t to say that all successful B&Bs must have an out-of-this-world theme or opulent architecture – though it helps. For many, the most compelling draw of a bed and breakfast is the intimate environment they offer guests. Conventional hotels can feel like a stopgap and sometimes even cold, but B&Bs often feel like a home away from home.
The overall atmosphere of a bed and breakfast differs from the atmosphere of a hotel. At a hotel, you’ll likely encounter a more corporate experience, including entering a lobby and speaking with hotel staff. At a B&B, you usually feel like you’re staying at a friend’s home.
B&Bs have lower occupancy rates than hotels, and guests typically engage with the same person for check-ins, questions and housekeeping.
In fact, it’s not uncommon for bed and breakfast owners or innkeepers to live or stay on-site to assist their guests. This increased attention can come in handy for guests who may have special dietary needs or require accommodations for mobility.
A bed and breakfast can be a fun and profitable investment property as long as you have the right tools and mindset.
What To Consider Before Buying A Bed And Breakfast
Although it may not be the most glamorous or fun part of becoming a business owner, doing your research to ensure smooth sailing is essential to setting yourself up for success – especially in the travel and hospitality industry.
Before you get too deep into your search for a dreamy property, make sure the B&B lifestyle is right for you. Here are some questions you can ask yourself to make sure innkeeping is a good fit for you:
*Are you capable of taking on the full-time responsibility of running a B&B?
*Are you okay taking on the financial risk of starting up a new business?
*Are you a sociable person?
*Do you enjoy meeting new people?
*Is problem-solving under pressure a skill you possess?
*Are you good with time management?
*Can you prepare a mouth-watering breakfast, or do you know someone who can?
*Are you comfortable being self-employed?
*Do you crack a smile while tackling routine or mundane tasks, like cleaning and cooking?
If you found yourself nodding yes to these questions, good news! You may be cut out for the B&B life! Just keep these responsibilities in mind as you continue working toward your innkeeping dream.
Are Bed And Breakfasts Profitable?
To put it simply, opening a B&B won’t make you rich overnight. Aspiring innkeepers should bear in mind the importance of being passionate about their work. It will take a lot of upkeep and hustle to stand out among the crowd and secure regular clients – which will be the main source of revenue for your business.
The most money you’ll make from your B&B will come whenever you decide to sell the property, but in the meantime, your business can be profitable with the right mix of ingredients. Let’s look at some factors that can affect how successful your bed and breakfast may be:
How many guests can your B&B host?
What would your hours of service be? Would you operate during holidays?
Do you have a lot of followers online? Do you have eye-catching ideas to promote your business?
How hard or long are you willing to work?
What are upkeep expenses, zoning fees and property taxes like in your area?
At the end of the day, the bed and breakfast industry isn’t something you should get into if your primary motivator is money. Keeping your guests happy can take a toll, and it’s not uncommon for B&B owners to earn an irregular income.
But for aspiring innkeepers with a passion for hosting or anyone longing for a career and lifestyle change, opening a B&B may be the perfect way to become your own boss.
How To Buy A Bed And Breakfast
Let’s take a closer look at how to buy a bed and breakfast.
1. Start The Property Search
Location and size are perhaps the most important characteristics that will determine the success of your business. The best places to invest in real estate are areas that attract tourists, like a bustling downtown or somewhere close to a city.
If you want your dream B&B to offer a more bucolic or rustic getaway experience, try and secure a unique property or set up shop in a peaceful and marketable rural area.
Guests are looking for a special getaway, so standing out among the large hotel chains, boutique hotels, motels and other B&Bs is key. Opening a B&B with a beautiful, unique view, guests can immerse themselves and help you do just that.
If it feels intimidating to start your business from scratch, you may benefit from buying an existing bed and breakfast. You’ll inherit the owner’s reservations and regulars, which may help reduce the stress of generating cash flow.
You may want to consider purchasing a fixer-upper property. You can renovate the house on your own to personalize the property even more.
2. Find The Right Real Estate Agent
With such an emphasis on finding the right location and property for your B&B, you’ll want to ensure you recruit the right person to help you purchase a property. A local real estate agent who knows the area where you want to buy can be an extremely helpful asset.
Don’t know where to begin when it comes to the property search? Working with an inn broker could be the right move for you. Inn brokers know the innkeeping industry and can offer consultations and advice that is specific to the industry. Whether you’re looking to buy, sell or learn more about opening a B&B, these experts can offer a helping hand.
3. Financing The Property
When it comes to financing your bed and breakfast, you’ve got options. Starting a new business means you can apply for Small Business Administration (SBA) loans. You should consider applying for a business credit card or line of credit. Both are great tools for startups or businesses experiencing initial operational or cash flow issues.
If you’re interested in getting a mortgage on the house, it may be more challenging, but it’s possible. Some lenders offer conventional loans (loans that aren’t insured by a government agency) for a bed and breakfast purchase, but that will vary by lender.
You should talk to a Home Loan Expert to learn whether purchasing a bed and breakfast would be considered a commercial or residential purchase. Call Bill at 718-791-3333 or visit www.commercialmortgageyes.com
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How To Start A Bed And Breakfast With No Money
Buying or investing in any sort of business comes with a price tag, but that doesn’t mean your innkeeping dreams are over because you don’t have excess cash lying around. Many B&B owners are retirees who enjoy the lifestyle. They may agree to take you under their wing and teach you their operation.
If you’re interested in getting into the innkeeping industry but have no cash on hand, consider seeking out B&B owners who are looking to sell or retire soon and pitch your vision and work ethic to them.
Innkeeping is a job that requires passion. Passion for the work is something a fellow enthusiast can recognize and may reward with a flexible payment plan to transfer the B&B’s operation over to you.
Questions To Ask When Buying A Bed And Breakfast
Still have your heart set on owning a bed and breakfast inn? Found a property you’re in love with but want to make sure you’re getting a good deal?
Here are some questions to ask before sealing the deal on a B&B purchase:
Is the property in a good location?
What sights, attractions or unique experiences does the location have to offer?
How big is the property?
Does the property have any unique features or amenities?
How many guest rooms and beds are available?
Are there private bathrooms or shared bathrooms?
Do any renovations need to be made?
Why is the current owner selling?
Who typically stays there?
What are the current room rates?
Are there zoning restrictions or other encumbrances?
Is the property open year-round or seasonally?
Does the owner operate alone, or do they have staff to help maintain the property?
Based on the answers, you can better manage the expectations and determine whether a B&B property is right for you and your financial situation.
Pros And Cons Of Buying A Bed And Breakfast
Owning and operating bed and breakfasts have taken off over the years – but it has its challenges. Let’s take a look at some of the pros and cons of buying a B&B.
Pros
You get to be your own boss.
The property is yours to personalize.
There are always opportunities to meet new people.
Cons
You are physically and financially responsible for the upkeep and maintenance of property and furnishings.
The profitability of the B&B will depend on several factors.
Managing a B&B may require a significant lifestyle change.
The hospitality industry is competitive.
The Bottom Line: Buying A Bed And Breakfast Requires A Business And Lifestyle Change
Taking on a bed and breakfast operation is a full-time gig that requires your personal touch and vision – and it may not be worth it to everyone. But if you have a stellar location and property in mind and you’re passionate about meeting new people and offering guests a great experience, clients, good reviews and revenue are bound to follow.
If you’re not ready to become an innkeeper but want to earn income from a property, you can learn how to Airbnb your house. It will allow you to practice your hospitality skills on a smaller scale before you invest in a bed and breakfast.
