What You’ll Need To Know Before Buying A Bed-And-Breakfast

If you love hosting guests and have always dreamed of owning your own business, perhaps being an innkeeper at a bed-and-breakfast is right for you. But like any business venture, running a bed-and-breakfast takes a lot of planning, research and dedication to be successful. Owning a bed-and-breakfast is more involved than renting out a room or a home as an Airbnb.

Learn the process of buying a bed-and-breakfast and discover if a B&B suits your lifestyle.

What Is A Bed-And-Breakfast?

Bed-and-breakfast establishments, also referred to as B&Bs, are small lodging properties that typically offer unique, personal experiences – for both the guests and the innkeeper – and homemade breakfasts.

Many B&Bs present guests with an opportunity to stay in unique spaces, like converted firehouses, taverns, historic buildings, houseboats and even treehouses. The uncommon lodging is usually an attraction guests want to explore throughout their stay.

That isn’t to say that all successful locations 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. Conventional hotels can feel like a stopgap and sometimes even cold, but B&Bs often feel like a home away from home.

Bed-And-Breakfast Vs. Hotel

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

Doing your research 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 great 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:

• Can you handle the financial risk of a new business?
• Do you enjoy meeting new people?
• Are you good with time management?
• Do you have cooking experience, or will you employ someone to cook?
• Are you comfortable being self-employed?
• Are you planning a seasonal schedule, and if so, how many days a year?
• Do you have capital for unexpected maintenance costs?
• Have you calculated the property taxes for your area into your budget?
• Will you host multiple guests?
• Will you pay anyone a salary?

In addition to assessing your strengths as an innkeeper, there are other facets to consider. Here are some additional questions to ask before sealing the deal on a B&B:

• What sights, attractions or unique experiences does the location offer?
• How big is the property?
• Does it 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?

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.

Are Bed-And-Breakfast Establishments Profitable?

Successfully owning a bed-and-breakfast is an achievable goal. Aspiring innkeepers should bear in mind the importance of being passionate about their work. It will take a lot of hustle to stand out among the crowd and secure regular clients – which will be the main source of revenue for your business.

However, the bed-and-breakfast industry is often about more than making money. It’s not uncommon for B&B owners to earn an irregular income. But for aspiring innkeepers with a passion, opening a B&B may be the perfect way to become your own boss.

How To Buy A Bed-And-Breakfast

Buying a B&B is a financial investment that requires three main steps. By proceeding methodically, you can find the right property that helps achieve your innkeeper dreams while staying within your financial realities.

1. Start The Property Search

Location and size are perhaps the most important characteristics in determining 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 to secure a unique property or set up shop in a peaceful and marketable rural area. Opening a B&B with a beautiful, unique view allows guests to immerse themselves in their surroundings.

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.

Another option is to work with an inn broker. Inn brokers know the innkeeping industry and can offer consultations and advice specific to the business. 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

There are options regarding financing your bed-and-breakfast. Starting a new business means you can apply for Small Business Administration (SBA) loans. You can also 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.

Interested in getting a mortgage on the house? 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.

How To Start A Bed-And-Breakfast With No Money

You can still pursue your innkeeping dreams without any extra money. Many B&B owners are retirees who enjoy the lifestyle. They may agree to take you under their wing and teach you their operation. Also 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 they may agree to a flexible payment plan to transfer the B&B’s operation over to you.

Pros And Cons Of Buying A Bed-And-Breakfast

Owning and operating bed-and-breakfast establishments has become increasingly popular over the years, but ownership presents unique challenges. Let’s take a look at some of the pros and cons of buying a B&B.

Pros

• You’re the boss and get to make the decisions.
• It’s possible to reap significant financial profit.
• There are always opportunities to meet new people.

Cons

• You’re physically and financially responsible for the maintenance of property and furnishings.
• Managing a B&B may require a significant lifestyle change.
• The hospitality industry is competitive.

The Bottom Line: Buying A Bed-And-Breakfast Can Be A Business Opportunity

Operating a bed-and-breakfast can be a full-time job that requires a personal touch and vision. If you have a stellar location in mind and you’re passionate about offering guests a great experience, you’ll likely have the tools to succeed. And once you’re ready to get started, choose a Rocket Homes^SM Verified Partner Agent to help you find the perfect property for your dream B&B.