Renting out an entire small house

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02/22/2017

My wife and I are currently looking at a large home that has three rentable bedrooms that would be perfect for B&B rental. It's a small antebellum with a gigantic addition that was built on in the 1970s to entertain business guests, so a portion of it is almost set up a bit like a "hotel." Next door to this house is a smaller kinda-tudor style home with about 1,200 square feet. There is nothing fancy about the little house at all, but it is for sale at a reasonable price and we were thinking about buying it and renting out the whole two-bedroom house as a single room. It's not as "nice" as staying in the big house, but it would offer space for a family or group and a private living room. The guests could just walk across the driveway in the morning for breakfast.

Does anyone have any experience with this?

Silverspoon's picture
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10/16/2011

We are set up much like you and have been successful running 2 suites in the main house and a stand alone 800 sq ft cottage on our property for 28 years.  The cottage only has one bedroom and we only rent it to 2 adults.  No kids, no pets.  That helps considerably cutting down on the amount of work to change over between guests. 

The "cottage" is our most popular accommodation accounting for more than half of our income.  We do all the work ourselves, except for weekly mowing in the summer.  One very nice perk is that when we are really and truly fed up with having guests in the house we can still have guests in the cottage! We offer it as a B+B, coming to the house for breakfast, or as a self-catering guest house at a slightly reduced rate.  

So yes, if you can afford the small house and you are in an area that has demand for lodging, go for it!

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Anon Inn's picture
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09/26/2011

Silverspoon wrote:

The "cottage" is our most popular accommodation accounting for more than half of our income.  We do all the work ourselves, except for weekly mowing in the summer.  One very nice perk is that when we are really and truly fed up with having guests in the house we can still have guests in the cottage! 

we do the same.  Separate apartment is self-catering with breakfast available at an extra charge (in the inn dining room or delivered to the apartment)

it is the most popular option by far, partly because we are in an outdoors oriented area and kids and dogs are welcome in the apartment. We are one of the very few in our area to welcome dogs. 

 

JimBoone's picture
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12/18/2014

Different view perhaps, but if it is within your means to purchase the next door house it does give you some control of your neighbors/neighborhood, over time we purchased the properties on either side of us for that reason.

If there is a market the small house could be a long term rental, protects your area and allows for future expansion. We initially rented nightly in our house next door, but tramping over to clean was not fun so long term renters were easier for us, more recently after many years it has become a home for our daughter and husband who now help the old folks with the business. Guess another option would be to use it as your home/office/apartment for privacy and devote the large home entirely to your guests.

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10/04/2015

See we are lucky in that there is a block of 9 flats next to us (ie attached on one side) so for the future we have the option to purchase them as we have the money and they come up for sale. 2 of them are already selfcatering apartments (ie whole flat holiday rentals) so as and when they come up for sale they may already have a diary ready to go.

Arks's picture
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05/22/2010

EarlVanDorn wrote:

My wife and I are currently looking at a large home that has three rentable bedrooms...

Assuming you are in a location that can support more than 3 rooms, you'll certainly make more money with more rooms to rent. A few years ago the consensus, as I recall it, was that you need 7 or 8 rooms at a B&B to make a good income. I started with 2, expanded to 5 a couple of years later, and my income much more than doubled.

And I'm not in any sort of destination location. Just a small sleepy town, but my 5 rooms are a lot nicer than anything else available around here, so I get the handful of visitors willing to pay more of a nicer experience. If they can find me. TA makes me stay down at the bottom of the local lodging list, below the fleabag motels, because I don't have a 24 hour front desk.

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02/22/2017

I thought once you got over five bedrooms you because subject to the ADA and had to go in and make a lot of expensive renovations. If we bought the little house we would have five bedrooms (counting the two-bedroom house as a single bedroom).

We do foresee some money from event income. I don't think the house has enough rooms for a business retreat, but we could host a smaller wedding reception. There's actually a very nice mansion down the street that rents for weddings for $1,500, so I would have to substantially undercut that price. Might be able to get rehearsal dinners, as I think with round tables we could seat 120-150.

Morticia's picture
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05/22/2008

EarlVanDorn wrote:

I thought once you got over five bedrooms you because subject to the ADA and had to go in and make a lot of expensive renovations. If we bought the little house we would have five bedrooms (counting the two-bedroom house as a single bedroom).

We do foresee some money from event income. I don't think the house has enough rooms for a business retreat, but we could host a smaller wedding reception. There's actually a very nice mansion down the street that rents for weddings for $1,500, so I would have to substantially undercut that price. Might be able to get rehearsal dinners, as I think with round tables we could seat 120-150.

If you are planning to seat that many people you are going to need to have handicap accessible bathrooms on the premises.

It's really difficult to get a straight answer on the ADA regulations. And, your state may have stricter guidelines.

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JimBoone's picture
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Arks wrote:

If they can find me. TA makes me stay down at the bottom of the local lodging list, below the fleabag motels, because I don't have a 24 hour front desk.

I wouldn't count on sitting at a front desk or being called a hotel/motel doing a lot to change your list position. Prior to the change a year or so ago we were at or near the top of the list based on the quality rating, with the change to include volume and perhaps review express to push folks for ratings we are near the bottom, as you say still a better quality rating than a number of those above us on the list, but if you go by quantity of reviews a place with 50 or 100 questionable rooms will get more total reviews than your 5 excellent rooms. 

Anon Inn's picture
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09/26/2011

Arks wrote:

TA makes me stay down at the bottom of the local lodging list, below the fleabag motels, because I don't have a 24 hour front desk.

i now have "24 hour front desk" in our property description, which we have had from the beginning.  The motels say they have this, but just try knocking on their doors at midnight !

Once the new website is done - it will feature the 24 hours plus room service - and we will try for a TA hotel rating.  One of our local inns bit the BKG line so now they place above us (we're#1), so a change in strategy is in order. This is a couple of months away however.  

OnTheShore's picture
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08/28/2011

We are "all cottages" including a 5-bedroom, 2-bath farmhouse that sleeps up to 10 (~1834 square feet), a 6-bedroom, 3-bath lodge that sleeps up to 9 (~1676 square feet), plus seven other cottages. All have complete kitchens.

We don't serve breakfast, and we do not clean or make beds during occupancy, but guests can exchange their sheets and towels for fresh ones if they wish by bringing them to our linen shed. So in many ways we are really more akin to "vacation rentals" than "B&B."

Morticia raises the issue of cleaning. We estimate that it should take about 5 person-hours to clean and changeover the farmhouse and the lodge, and 2 to 3 person-hours to clean and changeover each of the cottages (depending on the number of beds and bathrooms in each). We hire a crew of cleaners every year, so we personally do a minimum amount of cleaning. Pay your cleaners well if you want to get good cleaners who will be reliable and come back year after year (in our seasonal area, that's $20 to $25 per hour). We send all our laundry out to a service, and we estimate the laundry cost for a change-over at about $5/person max occupancy (so the farmhouse runs about $50 and the lodge $45...)

So, changing over these houses is expensive, and we set a three-night minimum in the off-season and a full week minimum during peak season, to make sure we are generating enough revenue to justify the costs.

From a business perspective, the question to ask is this: Is your area, or perhaps your specific location (even down to this particular house!), enough of a "destination" that guests are likely to want to come and stay for three nights or a week or even longer? Think also about the types of guests you are targeting with your business -- Are you likely to attract families or groups who would want this kind of accommodation, or do you see yourself more serving couples?

If you are thinking about nightly turnovers, how much would you have to charge to cover your costs, and will the market bear that?  The kitchen is a potential problem area here. For nightly turnovers, you would probably want to take the kitchen out of the house to reduce the cleaning costs, but for longer term "vacation" stays, having the kitchen would be an important draw....

The point here is, that unless you just have money to burn, you need to make a business case for acquiring this house in addition to the "inn" you are looking at.

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Breakfast Diva's picture
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05/26/2009

OnTheShore wrote:

We are "all cottages" including a 5-bedroom, 2-bath farmhouse that sleeps up to 10 (~1834 square feet), a 6-bedroom, 3-bath lodge that sleeps up to 9 (~1676 square feet), plus seven other cottages. All have complete kitchens.

We don't serve breakfast, and we do not clean or make beds during occupancy, but guests can exchange their sheets and towels for fresh ones if they wish by bringing them to our linen shed. So in many ways we are really more akin to "vacation rentals" than "B&B."

Morticia raises the issue of cleaning. We estimate that it should take about 5 person-hours to clean and changeover the farmhouse and the lodge, and 2 to 3 person-hours to clean and changeover each of the cottages (depending on the number of beds and bathrooms in each). We hire a crew of cleaners every year, so we personally do a minimum amount of cleaning. Pay your cleaners well if you want to get good cleaners who will be reliable and come back year after year (in our seasonal area, that's $20 to $25 per hour). We send all our laundry out to a service, and we estimate the laundry cost for a change-over at about $5/person max occupancy (so the farmhouse runs about $50 and the lodge $45...)

So, changing over these houses is expensive, and we set a three-night minimum in the off-season and a full week minimum during peak season, to make sure we are generating enough revenue to justify the costs.

From a business perspective, the question to ask is this: Is your area, or perhaps your specific location (even down to this particular house!), enough of a "destination" that guests are likely to want to come and stay for three nights or a week or even longer? Think also about the types of guests you are targeting with your business -- Are you likely to attract families or groups who would want this kind of accommodation, or do you see yourself more serving couples?

If you are thinking about nightly turnovers, how much would you have to charge to cover your costs, and will the market bear that?  The kitchen is a potential problem area here. For nightly turnovers, you would probably want to take the kitchen out of the house to reduce the cleaning costs, but for longer term "vacation" stays, having the kitchen would be an important draw....

The point here is, that unless you just have money to burn, you need to make a business case for acquiring this house in addition to the "inn" you are looking at.

Excellent advice!!

Morticia's picture
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05/22/2008

So unds like it could work. I'd consider how much you want to clean a 1200 sq ft house tho. That's a lot of work and it will include all the kitchen crap guests will leave you.

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