We are currently looking at a B&B that is for sale. It is a combination lifestyle, business and investment decision. I was wondering if anyone here had ever run a B&B and what the general thoughts about this type of house/business. It would mean that we would have to sell quite a number of properties we have in Brisbane to be able to afford to really give it a go.
B&B's, who's had anything to do with them?
- Thread starter suggo
- Start date
24 Hr Job
Sort of like a motel I guess without the multiple rooms.
Firstly I think anyone considering such needs to quantify if they really want to have people in their home that they have to serve and keep happy. It certainly takes a specially friendly outgoing couple to be able to do this constantly.
As well what sort of occupancy rate are you going to get. And more importantly what sort of return is expected?
Are you going to be at the Beck & Call of people 7 days a week for little more than wages.
As well what i have noticed is that as soon as people get B & B set up & registered they then think a property that was worth say $300k is now worth $600k. Just because it has changed it's usage. Without even proven cashflow.
It is certainly a item that gets down to personalities . I luv getting out and meeting people & traveling. But I will stick to wheeling and dealing & running my life the way I want. Just could not stand having to be stuck in place pampering everyone. Guess you have also got to look at what gain your investments are going to make over nest 5yrs or so against the cashflow - expenses - loss of lifestyle a B&B may have.
I am not knocking B&Bs. Just not my thing. If i were you I would put in a search for B&Bs & get in touch with a number of people running these businesses & associated organisations.
Not something to sell up & jump into . Just my opinion anyway.
Happy investing.
Gee Cee
undefinedundefinedI don't really know to much about B&Bs but I think they must be seriously taken as a business.suggo said:
Sort of like a motel I guess without the multiple rooms.
Firstly I think anyone considering such needs to quantify if they really want to have people in their home that they have to serve and keep happy. It certainly takes a specially friendly outgoing couple to be able to do this constantly.
As well what sort of occupancy rate are you going to get. And more importantly what sort of return is expected?
Are you going to be at the Beck & Call of people 7 days a week for little more than wages.
As well what i have noticed is that as soon as people get B & B set up & registered they then think a property that was worth say $300k is now worth $600k. Just because it has changed it's usage. Without even proven cashflow.
It is certainly a item that gets down to personalities . I luv getting out and meeting people & traveling. But I will stick to wheeling and dealing & running my life the way I want. Just could not stand having to be stuck in place pampering everyone. Guess you have also got to look at what gain your investments are going to make over nest 5yrs or so against the cashflow - expenses - loss of lifestyle a B&B may have.
I am not knocking B&Bs. Just not my thing. If i were you I would put in a search for B&Bs & get in touch with a number of people running these businesses & associated organisations.
Not something to sell up & jump into . Just my opinion anyway.
Happy investing.
Gee Cee
From what I could gather, a motel is sold on the basis of around the gross profit being 17.5% of the sale price.
That would be if you managed the place yourself. And it would also depend on a whole heap of other factors.
But I've heard reports (from my next door neighbour who owns one) that it can be a good deal.
B&B adds some more to the equation.
You are buying a job. It's a whole different equation from residential property (though it is possible to add value- or even to subdivide or other such activities). A run down place can offer a lot of opportunity- as can a good block of land with opportunities.
Check out http://www.bnbsales.com.au/ for some examples.
But if you do sell, the market is not very liquid IMHO. A local motel is still advertising 4-5 months after I was first aware of their intention to sell. Other locals have been on the market, been sold and have been operating within a much shorter time. It depends perhaps on price expectations.
That would be if you managed the place yourself. And it would also depend on a whole heap of other factors.
But I've heard reports (from my next door neighbour who owns one) that it can be a good deal.
B&B adds some more to the equation.
You are buying a job. It's a whole different equation from residential property (though it is possible to add value- or even to subdivide or other such activities). A run down place can offer a lot of opportunity- as can a good block of land with opportunities.
Check out http://www.bnbsales.com.au/ for some examples.
But if you do sell, the market is not very liquid IMHO. A local motel is still advertising 4-5 months after I was first aware of their intention to sell. Other locals have been on the market, been sold and have been operating within a much shorter time. It depends perhaps on price expectations.
Hi suggo
B&B ---- hummm... Don't touch it.
Lifestyle ? ---- getting up early in the morning making breakfast for cranky guest ? -- don't see any lifestyle in that...Waiting for guest checking in late ?
Business decision ? --- hummm , I don't know. A hobby, perhaps...
Investment decision ? --- hummm .
-----------------
It's only my opinion, which of course, you can totally ignore.
Cheeerrrrrs Jocker 10
B&B ---- hummm... Don't touch it.
Lifestyle ? ---- getting up early in the morning making breakfast for cranky guest ? -- don't see any lifestyle in that...Waiting for guest checking in late ?
Business decision ? --- hummm , I don't know. A hobby, perhaps...
Investment decision ? --- hummm .
-----------------
It's only my opinion, which of course, you can totally ignore.
Cheeerrrrrs Jocker 10
Hi Suggo
Go on ya, I can add that as someone who has always considered a BNB in my future the comments are generally correct. Here are some comments from me taken from asking and visiting BNB operators over the last 15 years,
VALUES
I often find the values range enormously and if considered as any other investment the return can be very poor. It appears to be better to buy existing that develop from a tax point and from hidden costs and risk (council approval)
LIFESTYLE
Great as you do get to live in (usually) a great place and if your a people person (essential) the experience of meeting guests can be just your thing.
VIABILITY
Important things are the stays.
Who is the market? DINKS, Grey Pilgrims, Family. Commercial Travellers?
Are they weekend only or all over the place. Can you close down for a seasonal holiday period (essential from operators I speak to) usually in the off season?
Are guests seasonal, i.e. coast in summer but not much in winter and inland vice versa. Build this in to your costings. Be wary if agents say the existing owners haven't chased this or that market as they usually have to no success.
HANDOVER
Will the existing owners do a handover say for three months to allow you to get the hang of things and introduce regulars. Are they going to stay if the existing owners leave? Can be very important.
STAFF
Generally limit to six rooms as after this you need staff and then profitablity drops. With staff you need 12+ and then it aint so much lifestyle.
LOCATION
Essential. Must be located close to weekend attractions, wineries, historic towns, cafes, etc.. Even 20 minutes can be too far. I.e. how goes to the Hunter Valley and stays at Cessnock? It only 15 minutes but it doesn’t appeal.
MARKETING
Professional Website essential for serious operator.
REFERENCE
By far the best book is
Stewart Whyte: Bed and Breakfast in Australia: a practical guide for owners ISBN 0 9578324
Publisher Market Probe Aust.
Websites
Info and planning
http://www.bnb-central.com/bnb-aus/lifestyle_program2.htm
sales of BNB
http://www.bnbsales.com.au/
Hope this helps and good luck, Peter 147
Go on ya, I can add that as someone who has always considered a BNB in my future the comments are generally correct. Here are some comments from me taken from asking and visiting BNB operators over the last 15 years,
VALUES
I often find the values range enormously and if considered as any other investment the return can be very poor. It appears to be better to buy existing that develop from a tax point and from hidden costs and risk (council approval)
LIFESTYLE
Great as you do get to live in (usually) a great place and if your a people person (essential) the experience of meeting guests can be just your thing.
VIABILITY
Important things are the stays.
Who is the market? DINKS, Grey Pilgrims, Family. Commercial Travellers?
Are they weekend only or all over the place. Can you close down for a seasonal holiday period (essential from operators I speak to) usually in the off season?
Are guests seasonal, i.e. coast in summer but not much in winter and inland vice versa. Build this in to your costings. Be wary if agents say the existing owners haven't chased this or that market as they usually have to no success.
HANDOVER
Will the existing owners do a handover say for three months to allow you to get the hang of things and introduce regulars. Are they going to stay if the existing owners leave? Can be very important.
STAFF
Generally limit to six rooms as after this you need staff and then profitablity drops. With staff you need 12+ and then it aint so much lifestyle.
LOCATION
Essential. Must be located close to weekend attractions, wineries, historic towns, cafes, etc.. Even 20 minutes can be too far. I.e. how goes to the Hunter Valley and stays at Cessnock? It only 15 minutes but it doesn’t appeal.
MARKETING
Professional Website essential for serious operator.
REFERENCE
By far the best book is
Stewart Whyte: Bed and Breakfast in Australia: a practical guide for owners ISBN 0 9578324
Publisher Market Probe Aust.
Websites
Info and planning
http://www.bnb-central.com/bnb-aus/lifestyle_program2.htm
sales of BNB
http://www.bnbsales.com.au/
Hope this helps and good luck, Peter 147
Suggo
I was a business broker for a few years and had many B&B's offered to me but I would not list them. They usually just don't stack up as a business and are impossible to sell to switched on people. ( Retired pretentious school teachers and gay couples may be the exception)
Why not look at a good motel with over 25 units or even a caravan park...both can be a cracker business in the right area and are very saleable.
Many B&B's eventually revert to residences after the operators tire of cooking and cleaning on demand and realise purchasers are very hard to find.
Cheers
I was a business broker for a few years and had many B&B's offered to me but I would not list them. They usually just don't stack up as a business and are impossible to sell to switched on people. ( Retired pretentious school teachers and gay couples may be the exception)
Why not look at a good motel with over 25 units or even a caravan park...both can be a cracker business in the right area and are very saleable.
Many B&B's eventually revert to residences after the operators tire of cooking and cleaning on demand and realise purchasers are very hard to find.
Cheers
B and B
Do search on net for state BandB owner associations.
google "Bed and Breakfast" site:au +training
gives
like this link
http://www.bedandbreakfast.org.au/training/tafe-syllabus.html <<< good
http://www.bedandbreakfast.org.au/training/
I read a newspaper articale in FR a few years ago about this and it mentioned that one of the associations had a training course for people intending to come into the industry. The articale said that most people after doing the course did not proceed with purchasing / running a b and b
Could probably locate articale on www.newstext.com.au or FinReview site
Do search on net for state BandB owner associations.
google "Bed and Breakfast" site:au +training
gives
like this link
http://www.bedandbreakfast.org.au/training/tafe-syllabus.html <<< good
http://www.bedandbreakfast.org.au/training/
I read a newspaper articale in FR a few years ago about this and it mentioned that one of the associations had a training course for people intending to come into the industry. The articale said that most people after doing the course did not proceed with purchasing / running a b and b
Could probably locate articale on www.newstext.com.au or FinReview site
Suggo, have you considered buying the management rights to a holiday apartment complex? It may be a more viable alternative to a B&B depending on what sort of return you are after vs work required.
l mention this because an agent we keep in touch with has just listed the management rights to one of the best complex's in Merimbula for 1.2mill, netting $180k per year. This includes a managers residence on its own strata title in the price, so you also share in the CG from building a successful business. 90% occupancy though, so it would be full on.
Just another option
l mention this because an agent we keep in touch with has just listed the management rights to one of the best complex's in Merimbula for 1.2mill, netting $180k per year. This includes a managers residence on its own strata title in the price, so you also share in the CG from building a successful business. 90% occupancy though, so it would be full on.
Just another option
