Appraising a bed and breakfast

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jamesandjill

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Hi guys it's been awhile been super busy.
My husband and I have been leasing to own an Inn for almost 3 years and it's time to buy because of specifications in the lease.
My question is this, how do you appraise a bed and breakfast?
The property is appraising at about $330,00 but that does not include the content of the house.
 
Of the contents, what would you want to keep vs what you will be replacing anyway. If you have a clear idea of that value, it may help.
 
Contents: Idle thoughts
As part of your arrangement to purchase are you required to also purchase those contents? That may be the key to the cost.
The plus to you is that you don't need to run purchase replacements, but unless those contents include valuable antiques, disposing of those contents would seem to be a lot of work for not much money if I were the seller.
As I look around I see two or three main types of contents:
[1] furnishings and equipment, I would expect those to be on a depreciation table for taxes, that value might be a good starting point, more than that value would likely mean the seller owed taxes on a profit. You need to know that amount so that you can continue to depreciate on your taxes.
[2] Linen, bedding, towels, things of that nature, while they may not be on a schedule they do have a life cycle, unless early in that cycle or very high end I wouldn't think they represented a huge value.
 
The current owner wants over $400,000 but the loan broker were working with says the online appraisal says about $330,000.
How does someone appraise a bed and breakfast?
We are keeping everything in the house and have also replaced some tv's and mattresses among other things.
 
The current owner wants over $400,000 but the loan broker were working with says the online appraisal says about $330,000.
How does someone appraise a bed and breakfast?
We are keeping everything in the house and have also replaced some tv's and mattresses among other things..
Just my own thoughts,
Whatever the value, to me the question is can I pay the loan and earn a living, do I feel like it is a good deal that will last over time, don’t let your heart overrule the facts.
To me the answer to your question would be the value of the physical property with perhaps consideration of the value of the business although if you have been leasing and operating the business much of that business value may be the result of your own efforts
 
The current owner wants over $400,000 but the loan broker were working with says the online appraisal says about $330,000.
How does someone appraise a bed and breakfast?
We are keeping everything in the house and have also replaced some tv's and mattresses among other things..
jamesandjill said:
The current owner wants over $400,000 but the loan broker were working with says the online appraisal says about $330,000. How does someone appraise a bed and breakfast? We are keeping everything in the house and have also replaced some tv's and mattresses among other things.
The loan broker is basing the ability to get a mortgage on Zillow ratings??? That's BS.
You can pay for a qualified appraisal (about $2500) and have everything gone over by someone who knows what they're doing. Not the bozo in the office. Get a different mortgage broker while you're at it. Someone who knows how to appraise a B&B. That is not really your job. Altho you may have to find the right person to do it.
If you are in an area with other B&B's ask them who did their appraisal. You want someone who knows how to appraise a business, not just a building + lot. Call a few banks while you're at it to ask who they recommend for a business appraisal. You can also look on business broker websites as they sometimes list who they work with.
 
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