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llongendyke

llongendyke

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Nov 18, 2013
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Hello, everyone. I am an aspiring innkeeper who is researching the amount of capital I need to raise to realize my dream. Does anyone have any advice?
Here is some background about me and my situation:
I am in my 20s and my husband is in his 30s. We are both employed; I work in marketing and my husband works for the federal government. We (well, mainly I) want to own our own inn. I've read all the warnings against inflated expectations, and I understand that it will be a challenging way to earn a living. Nevertheless, for many reasons, my husband and I feel that innkeeping would be a good fit for our interests and talents.
The inn must be self-sustaining, likely a minimum of 10 guest rooms. It must have owners quarters that can accommodate myself, my husband, and a child (the child doesn't exist yet but if all goes to plan, he/she will by the time we buy an inn). A two room apartment of sorts would be fine. Depending on the availability of daycare (aka grandparents) we would hire 1-2 staff members in the beginning to help with housekeeping. We will likely look for an existing inn located in western North Carolina.
Specifically, I would like to know:
What percentage of the property's mortgage must we have raised as a down payment? From what I've seen, this is usually 15-20%. Is that correct?
For about how long should our savings cover operating costs after purchase?
Any advice you can share would be tremendously helpful. I see two options before me: I can try to make my dream happen as soon as possible, or I can go to grad school and work another 10 years in a profession I don't love and save considerably more money before making this happen.
 
Ok, so I'm curious. How much do you think a property like the one you described sells for? I'm wondering if your expectations are reasonable.
 
Depending on the renovation needs, I've seen properties listed between 1 and 1.5 million dollars. Does that sound about right to you?
 
Breakfast Diva said:
Ok, so I'm curious. How much do you think a property like the one you described sells for? I'm wondering if your expectations are reasonable..
Click to expand...
Oops, I think I replied in the wrong place (I'm new to this discussion board). To answer your question, I have seen properties like the one I describe listed for 1 to 1.5 million, depending on the renovation costs.
 
Our inn has 7 rooms and is self-sustaining. We have approx 1000 sq ft space of our own. 2 people. We still get in each other's hair. Please don't think you will be happy with 2 rooms for 3 people. (Unless you meant 2 bedrooms along with your own kitchen, living room and dining room and a couple of bathrooms.)
If you have an idea what your expenses will be you should have AT LEAST 6 months' backup money stored away in case no one comes to stay and you have to pay bills out of pocket. Seriously, tho, if the biz is up and running well you won't touch that nest egg. If it's not a stable property you should think closer to one year of backup money.
A 10 room inn will need more than 1-2 housekeeping staff if you want to have any time to yourselves in your busiest seasons. We have done all the work around the inn in years we cannot find help. You have ZERO time for that little kid if you don't have enough help.
Have you gone to any classes? Those help. Here's a suggestion - write down exactly what you think your day will look like, who will do what jobs, when those jobs will get done and how long you think each job takes. (This is appropriate for undertaking any self employment.)
When you have the list of everything that has to get done in a day, then slot in your family time. OR, account for your family time first and then slot in the inn chores.
This is a helpful exercise. It's hard to picture everything that has to happen everyday unless you write it down and assign a time limit to it.
As for how much of a down payment you need a lot of that depends on where you borrow the money. We put down 25% 10 years ago with a reserve of 9 months' expenses in the bank. We bought an existing biz. We would have been better off putting down 50% to keep the monthly costs lower. We just didn't have that much.
Also consider if you plan to renovate the rooms when you take over. All new bedding will run you about $2000/room. What shape is the kitchen in? Does everything you see come with the property or will the present owners gut the place? (It happens.)
 
llongendyke said:
Depending on the renovation needs, I've seen properties listed between 1 and 1.5 million dollars. Does that sound about right to you?.
Click to expand...
llongendyke said:
Depending on the renovation needs, I've seen properties listed between 1 and 1.5 million dollars. Does that sound about right to you?
Click to expand...
It really depends on the property. Is it fully functioning? Does it have reservations on the books for next year? Is it being taken care of right now or is it falling apart? All of these things come into play.
 
Madeleine said:
Our inn has 7 rooms and is self-sustaining. We have approx 1000 sq ft space of our own. 2 people. We still get in each other's hair. Please don't think you will be happy with 2 rooms for 3 people. (Unless you meant 2 bedrooms along with your own kitchen, living room and dining room and a couple of bathrooms.)
If you have an idea what your expenses will be you should have AT LEAST 6 months' backup money stored away in case no one comes to stay and you have to pay bills out of pocket. Seriously, tho, if the biz is up and running well you won't touch that nest egg. If it's not a stable property you should think closer to one year of backup money.
A 10 room inn will need more than 1-2 housekeeping staff if you want to have any time to yourselves in your busiest seasons. We have done all the work around the inn in years we cannot find help. You have ZERO time for that little kid if you don't have enough help.
Have you gone to any classes? Those help. Here's a suggestion - write down exactly what you think your day will look like, who will do what jobs, when those jobs will get done and how long you think each job takes. (This is appropriate for undertaking any self employment.)
When you have the list of everything that has to get done in a day, then slot in your family time. OR, account for your family time first and then slot in the inn chores.
This is a helpful exercise. It's hard to picture everything that has to happen everyday unless you write it down and assign a time limit to it.
As for how much of a down payment you need a lot of that depends on where you borrow the money. We put down 25% 10 years ago with a reserve of 9 months' expenses in the bank. We bought an existing biz. We would have been better off putting down 50% to keep the monthly costs lower. We just didn't have that much.
Also consider if you plan to renovate the rooms when you take over. All new bedding will run you about $2000/room. What shape is the kitchen in? Does everything you see come with the property or will the present owners gut the place? (It happens.).
Click to expand...
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
 
llongendyke said:
Madeleine said:
Our inn has 7 rooms and is self-sustaining. We have approx 1000 sq ft space of our own. 2 people. We still get in each other's hair. Please don't think you will be happy with 2 rooms for 3 people. (Unless you meant 2 bedrooms along with your own kitchen, living room and dining room and a couple of bathrooms.)
If you have an idea what your expenses will be you should have AT LEAST 6 months' backup money stored away in case no one comes to stay and you have to pay bills out of pocket. Seriously, tho, if the biz is up and running well you won't touch that nest egg. If it's not a stable property you should think closer to one year of backup money.
A 10 room inn will need more than 1-2 housekeeping staff if you want to have any time to yourselves in your busiest seasons. We have done all the work around the inn in years we cannot find help. You have ZERO time for that little kid if you don't have enough help.
Have you gone to any classes? Those help. Here's a suggestion - write down exactly what you think your day will look like, who will do what jobs, when those jobs will get done and how long you think each job takes. (This is appropriate for undertaking any self employment.)
When you have the list of everything that has to get done in a day, then slot in your family time. OR, account for your family time first and then slot in the inn chores.
This is a helpful exercise. It's hard to picture everything that has to happen everyday unless you write it down and assign a time limit to it.
As for how much of a down payment you need a lot of that depends on where you borrow the money. We put down 25% 10 years ago with a reserve of 9 months' expenses in the bank. We bought an existing biz. We would have been better off putting down 50% to keep the monthly costs lower. We just didn't have that much.
Also consider if you plan to renovate the rooms when you take over. All new bedding will run you about $2000/room. What shape is the kitchen in? Does everything you see come with the property or will the present owners gut the place? (It happens.).
Click to expand...
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
.
Click to expand...
llongendyke said:
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
Click to expand...
You will actually need to put down a big chunk, not sure if that is as much as you have, but banks are not handing out business loans easily these days. I would contact someone you would consider giving this loan and ask them for details. All the best in your journey, that is half the fun!
thumbs_up.gif

 
Joey Bloggs said:
llongendyke said:
Madeleine said:
Our inn has 7 rooms and is self-sustaining. We have approx 1000 sq ft space of our own. 2 people. We still get in each other's hair. Please don't think you will be happy with 2 rooms for 3 people. (Unless you meant 2 bedrooms along with your own kitchen, living room and dining room and a couple of bathrooms.)
If you have an idea what your expenses will be you should have AT LEAST 6 months' backup money stored away in case no one comes to stay and you have to pay bills out of pocket. Seriously, tho, if the biz is up and running well you won't touch that nest egg. If it's not a stable property you should think closer to one year of backup money.
A 10 room inn will need more than 1-2 housekeeping staff if you want to have any time to yourselves in your busiest seasons. We have done all the work around the inn in years we cannot find help. You have ZERO time for that little kid if you don't have enough help.
Have you gone to any classes? Those help. Here's a suggestion - write down exactly what you think your day will look like, who will do what jobs, when those jobs will get done and how long you think each job takes. (This is appropriate for undertaking any self employment.)
When you have the list of everything that has to get done in a day, then slot in your family time. OR, account for your family time first and then slot in the inn chores.
This is a helpful exercise. It's hard to picture everything that has to happen everyday unless you write it down and assign a time limit to it.
As for how much of a down payment you need a lot of that depends on where you borrow the money. We put down 25% 10 years ago with a reserve of 9 months' expenses in the bank. We bought an existing biz. We would have been better off putting down 50% to keep the monthly costs lower. We just didn't have that much.
Also consider if you plan to renovate the rooms when you take over. All new bedding will run you about $2000/room. What shape is the kitchen in? Does everything you see come with the property or will the present owners gut the place? (It happens.).
Click to expand...
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
.
Click to expand...
llongendyke said:
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
Click to expand...
You will actually need to put down a big chunk, not sure if that is as much as you have, but banks are not handing out business loans easily these days. I would contact someone you would consider giving this loan and ask them for details. All the best in your journey, that is half the fun!
thumbs_up.gif

.
Click to expand...
Ha, well, we actually have very little saved at the moment, but we do have a vintage sailboat that we've been restoring over the last few years. We plan on going on a little sailing adventure and then selling it. That will be our "chunk" to begin with... less than 100K which is obviously nowhere near enough.
I'm doing this research now because if it turns out that we have to work for another 5-10 years to save up the capital we need, I might invest in grad school so that those years are more fruitful (factoring in the cost of tuition of course). But I'd much rather start my business as soon as possible because running an inn is truly what I want to do. I really do enjoy being on my feet, working with my hands, creating a nice experience for people, cooking, cleaning, budgeting, planning... But I digress...
Another young woman on this forum asked about lease to own options... Sounds like a rare opportunity but something I could keep an eye out for?
 
I would say the type of property you're interested in is more is the 1.5 - 2.5mil range and you would need at least 40% down. Interest rates are going to go up, so do the math on a mortgage calculator and keep in mind that commercial loans are higher interest rates and the pay back period is less years (no 30 year mortgage). As JB said, the banks are pretty tight on lending for this industry. They also want to see experience, so if you can work or do an internship at a b&b the size you're interested in, it would really help. Not only do the banks need it, but you would experience for yourself what life as an innkeeper would be like.
I would also caution you that your husband has to share your dream 100%. This is the type of business where you live, work, breath it! Also, for myself, I couldn't imagine being pregnant and raising a young infant/toddler and being an innkeeper. But, I'll let others on here with children fill you in more.
I'm not trying to dissuade you, but it's important that you think in realistic terms.
lightbulb.gif
 
llongendyke said:
Madeleine said:
Our inn has 7 rooms and is self-sustaining. We have approx 1000 sq ft space of our own. 2 people. We still get in each other's hair. Please don't think you will be happy with 2 rooms for 3 people. (Unless you meant 2 bedrooms along with your own kitchen, living room and dining room and a couple of bathrooms.)
If you have an idea what your expenses will be you should have AT LEAST 6 months' backup money stored away in case no one comes to stay and you have to pay bills out of pocket. Seriously, tho, if the biz is up and running well you won't touch that nest egg. If it's not a stable property you should think closer to one year of backup money.
A 10 room inn will need more than 1-2 housekeeping staff if you want to have any time to yourselves in your busiest seasons. We have done all the work around the inn in years we cannot find help. You have ZERO time for that little kid if you don't have enough help.
Have you gone to any classes? Those help. Here's a suggestion - write down exactly what you think your day will look like, who will do what jobs, when those jobs will get done and how long you think each job takes. (This is appropriate for undertaking any self employment.)
When you have the list of everything that has to get done in a day, then slot in your family time. OR, account for your family time first and then slot in the inn chores.
This is a helpful exercise. It's hard to picture everything that has to happen everyday unless you write it down and assign a time limit to it.
As for how much of a down payment you need a lot of that depends on where you borrow the money. We put down 25% 10 years ago with a reserve of 9 months' expenses in the bank. We bought an existing biz. We would have been better off putting down 50% to keep the monthly costs lower. We just didn't have that much.
Also consider if you plan to renovate the rooms when you take over. All new bedding will run you about $2000/room. What shape is the kitchen in? Does everything you see come with the property or will the present owners gut the place? (It happens.).
Click to expand...
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
.
Click to expand...
llongendyke said:
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Click to expand...
Something else to keep in mind - right now you are probably not living in your place of work. (Altho one innkeeper here does innkeep on a boat!) You may also not be working together 24x7 right now. When you have no place to escape from work or each other then 800 sq ft might seem dangerously small. Plus, if you are hoping to have grandparents in the space caring for the child they will be taking up space also.
I will append to this that I am an introverted kind of person and I need a lot of downtime and space of my own. I know there are people who are different. I don't know how they do it. ;-)
 
Madeleine said:
llongendyke said:
Madeleine said:
Our inn has 7 rooms and is self-sustaining. We have approx 1000 sq ft space of our own. 2 people. We still get in each other's hair. Please don't think you will be happy with 2 rooms for 3 people. (Unless you meant 2 bedrooms along with your own kitchen, living room and dining room and a couple of bathrooms.)
If you have an idea what your expenses will be you should have AT LEAST 6 months' backup money stored away in case no one comes to stay and you have to pay bills out of pocket. Seriously, tho, if the biz is up and running well you won't touch that nest egg. If it's not a stable property you should think closer to one year of backup money.
A 10 room inn will need more than 1-2 housekeeping staff if you want to have any time to yourselves in your busiest seasons. We have done all the work around the inn in years we cannot find help. You have ZERO time for that little kid if you don't have enough help.
Have you gone to any classes? Those help. Here's a suggestion - write down exactly what you think your day will look like, who will do what jobs, when those jobs will get done and how long you think each job takes. (This is appropriate for undertaking any self employment.)
When you have the list of everything that has to get done in a day, then slot in your family time. OR, account for your family time first and then slot in the inn chores.
This is a helpful exercise. It's hard to picture everything that has to happen everyday unless you write it down and assign a time limit to it.
As for how much of a down payment you need a lot of that depends on where you borrow the money. We put down 25% 10 years ago with a reserve of 9 months' expenses in the bank. We bought an existing biz. We would have been better off putting down 50% to keep the monthly costs lower. We just didn't have that much.
Also consider if you plan to renovate the rooms when you take over. All new bedding will run you about $2000/room. What shape is the kitchen in? Does everything you see come with the property or will the present owners gut the place? (It happens.).
Click to expand...
Thanks Madeleine for the information! It's good to know that if we buy a functioning business (which we would try to do) we shouldn't need to dip too far into savings, but it's definitely a good idea to have savings just in case. 6-9 months worth sounds about right.
Also thanks for the heads up on the number of housekeepers we would need.
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Ok, so, sounds like in summary: We should put down as much as we can and have 6-9 months of expenses covered by reserves, provided we are buying a functioning business. Thanks! This really helps.
.
Click to expand...
llongendyke said:
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Click to expand...
Something else to keep in mind - right now you are probably not living in your place of work. (Altho one innkeeper here does innkeep on a boat!) You may also not be working together 24x7 right now. When you have no place to escape from work or each other then 800 sq ft might seem dangerously small. Plus, if you are hoping to have grandparents in the space caring for the child they will be taking up space also.
I will append to this that I am an introverted kind of person and I need a lot of downtime and space of my own. I know there are people who are different. I don't know how they do it. ;-)
.
Click to expand...
Madeleine said:
llongendyke said:
Luckily, my husband and I don't require a lot of space to ourselves. For 2 years we lived on a sailboat together and now we live in an 800 sq apartment and it feels just huge to us! But adding a child to the mix could complicate things for sure... all things to think about.
Click to expand...
Something else to keep in mind - right now you are probably not living in your place of work. (Altho one innkeeper here does innkeep on a boat!) You may also not be working together 24x7 right now. When you have no place to escape from work or each other then 800 sq ft might seem dangerously small. Plus, if you are hoping to have grandparents in the space caring for the child they will be taking up space also.
I will append to this that I am an introverted kind of person and I need a lot of downtime and space of my own. I know there are people who are different. I don't know how they do it. ;-)
Click to expand...
I'm right there with you Maddie! I need my alone time and especially the first year of innkeeping I thought I would go nuts. DH and I bickered and fought (in whispers) all the time because we were together 24/7, no alone time and now each of us was telling the other what to do. I changes the dynamic of your relationship. Fortunately, that 1st was the worst and it got better, but even now, I'm so looking forward to getting out of here alone today and staying overnight in "The Big City" because of a Dr. appointment. It's also why innkeepers need to take their vacations away from the b&b...it brings the relationship back to being a couple and not 'innkeepers'.
 
Breakfast Diva said:
I would say the type of property you're interested in is more is the 1.5 - 2.5mil range and you would need at least 40% down. Interest rates are going to go up, so do the math on a mortgage calculator and keep in mind that commercial loans are higher interest rates and the pay back period is less years (no 30 year mortgage). As JB said, the banks are pretty tight on lending for this industry. They also want to see experience, so if you can work or do an internship at a b&b the size you're interested in, it would really help. Not only do the banks need it, but you would experience for yourself what life as an innkeeper would be like.
I would also caution you that your husband has to share your dream 100%. This is the type of business where you live, work, breath it! Also, for myself, I couldn't imagine being pregnant and raising a young infant/toddler and being an innkeeper. But, I'll let others on here with children fill you in more.
I'm not trying to dissuade you, but it's important that you think in realistic terms.
lightbulb.gif
.
Click to expand...
This is really useful advice, thank you!
Saving up $800,000 (40% of 2 million) could take us 20 years... Perhaps it would be better to look at a smaller property? Madeleine said hers has 7 guest rooms and is sustainable, which is interesting because I heard that the rule of thumb is 8 for sustainability... but I guess it all depends on the property and the capability of the owners to market their inn (I work in marketing so I'm optimistic about my abilities in that area! :p )
If we could get started with something small and be able to support ourselves and a child, with some hard work, smart thinking, and patience hopefully we could grow to a second location or expand the property. This is something I'd consider -- a smaller house with land that can be built on in the future.
Working in an inn for experience makes perfect sense, and I am starting to think that should be a mandatory prerequisite.
And I agree that my husband has to be 100% bought-in. He says he is, but I'll know for sure when this all gets a little more "real."
Thanks again for the advice!
 
llongendyke said:
Breakfast Diva said:
I would say the type of property you're interested in is more is the 1.5 - 2.5mil range and you would need at least 40% down. Interest rates are going to go up, so do the math on a mortgage calculator and keep in mind that commercial loans are higher interest rates and the pay back period is less years (no 30 year mortgage). As JB said, the banks are pretty tight on lending for this industry. They also want to see experience, so if you can work or do an internship at a b&b the size you're interested in, it would really help. Not only do the banks need it, but you would experience for yourself what life as an innkeeper would be like.
I would also caution you that your husband has to share your dream 100%. This is the type of business where you live, work, breath it! Also, for myself, I couldn't imagine being pregnant and raising a young infant/toddler and being an innkeeper. But, I'll let others on here with children fill you in more.
I'm not trying to dissuade you, but it's important that you think in realistic terms.
lightbulb.gif
.
Click to expand...
This is really useful advice, thank you!
Saving up $800,000 (40% of 2 million) could take us 20 years... Perhaps it would be better to look at a smaller property? Madeleine said hers has 7 guest rooms and is sustainable, which is interesting because I heard that the rule of thumb is 8 for sustainability... but I guess it all depends on the property and the capability of the owners to market their inn (I work in marketing so I'm optimistic about my abilities in that area! :p )
If we could get started with something small and be able to support ourselves and a child, with some hard work, smart thinking, and patience hopefully we could grow to a second location or expand the property. This is something I'd consider -- a smaller house with land that can be built on in the future.
Working in an inn for experience makes perfect sense, and I am starting to think that should be a mandatory prerequisite.
And I agree that my husband has to be 100% bought-in. He says he is, but I'll know for sure when this all gets a little more "real."
Thanks again for the advice!
.
Click to expand...
llongendyke said:
This is really useful advice, thank you!
Saving up $800,000 (40% of 2 million) could take us 20 years... Perhaps it would be better to look at a smaller property? Madeleine said hers has 7 guest rooms and is sustainable, which is interesting because I heard that the rule of thumb is 8 for sustainability... but I guess it all depends on the property and the capability of the owners to market their inn (I work in marketing so I'm optimistic about my abilities in that area! :p )
If we could get started with something small and be able to support ourselves and a child, with some hard work, smart thinking, and patience hopefully we could grow to a second location or expand the property. This is something I'd consider -- a smaller house with land that can be built on in the future.
Working in an inn for experience makes perfect sense, and I am starting to think that should be a mandatory prerequisite.
And I agree that my husband has to be 100% bought-in. He says he is, but I'll know for sure when this all gets a little more "real."
Thanks again for the advice!
Click to expand...
You're welcome! By the way, "sustainable" means it can pay it's bills and allows the innkeepers to not have outside jobs. The other type is a "lifestyle" property that typically sells for what the property value is worth and maybe a little more. The more profit an inn makes, of course the higher the price tag. What you want to look for is a property that is sustainable AND you see some significant areas where you think you can do better.
There are so many variables in this business. Your rule of thumb of 8 rooms for instance...let's say a b&b has 8 rooms, and has a 35% occupancy with rooms at $125 per night. But there is also that b&b that has 5 rooms with 60% occupancy and their rooms go for $250 a night. The bottom line is revenue, not the number of rooms.
 
Breakfast Diva said:
llongendyke said:
Breakfast Diva said:
I would say the type of property you're interested in is more is the 1.5 - 2.5mil range and you would need at least 40% down. Interest rates are going to go up, so do the math on a mortgage calculator and keep in mind that commercial loans are higher interest rates and the pay back period is less years (no 30 year mortgage). As JB said, the banks are pretty tight on lending for this industry. They also want to see experience, so if you can work or do an internship at a b&b the size you're interested in, it would really help. Not only do the banks need it, but you would experience for yourself what life as an innkeeper would be like.
I would also caution you that your husband has to share your dream 100%. This is the type of business where you live, work, breath it! Also, for myself, I couldn't imagine being pregnant and raising a young infant/toddler and being an innkeeper. But, I'll let others on here with children fill you in more.
I'm not trying to dissuade you, but it's important that you think in realistic terms.
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This is really useful advice, thank you!
Saving up $800,000 (40% of 2 million) could take us 20 years... Perhaps it would be better to look at a smaller property? Madeleine said hers has 7 guest rooms and is sustainable, which is interesting because I heard that the rule of thumb is 8 for sustainability... but I guess it all depends on the property and the capability of the owners to market their inn (I work in marketing so I'm optimistic about my abilities in that area! :p )
If we could get started with something small and be able to support ourselves and a child, with some hard work, smart thinking, and patience hopefully we could grow to a second location or expand the property. This is something I'd consider -- a smaller house with land that can be built on in the future.
Working in an inn for experience makes perfect sense, and I am starting to think that should be a mandatory prerequisite.
And I agree that my husband has to be 100% bought-in. He says he is, but I'll know for sure when this all gets a little more "real."
Thanks again for the advice!
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llongendyke said:
This is really useful advice, thank you!
Saving up $800,000 (40% of 2 million) could take us 20 years... Perhaps it would be better to look at a smaller property? Madeleine said hers has 7 guest rooms and is sustainable, which is interesting because I heard that the rule of thumb is 8 for sustainability... but I guess it all depends on the property and the capability of the owners to market their inn (I work in marketing so I'm optimistic about my abilities in that area! :p )
If we could get started with something small and be able to support ourselves and a child, with some hard work, smart thinking, and patience hopefully we could grow to a second location or expand the property. This is something I'd consider -- a smaller house with land that can be built on in the future.
Working in an inn for experience makes perfect sense, and I am starting to think that should be a mandatory prerequisite.
And I agree that my husband has to be 100% bought-in. He says he is, but I'll know for sure when this all gets a little more "real."
Thanks again for the advice!
Click to expand...
You're welcome! By the way, "sustainable" means it can pay it's bills and allows the innkeepers to not have outside jobs. The other type is a "lifestyle" property that typically sells for what the property value is worth and maybe a little more. The more profit an inn makes, of course the higher the price tag. What you want to look for is a property that is sustainable AND you see some significant areas where you think you can do better.
There are so many variables in this business. Your rule of thumb of 8 rooms for instance...let's say a b&b has 8 rooms, and has a 35% occupancy with rooms at $125 per night. But there is also that b&b that has 5 rooms with 60% occupancy and their rooms go for $250 a night. The bottom line is revenue, not the number of rooms.
.
Click to expand...
What you want to look for is a property that is sustainable AND you see some significant areas where you think you can do better.
Exactly! I think my husband and I would do well with this strategy because we can be creative and resourceful. Part of the appeal for me is finding a property that needs a little work and turning it into a more beautiful destination.
And good point too about the variables... I will certainly keep that in mind.
 

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