OK, we're actually getting ready to "kick the tires" at two locations. Based on the combined wisdom and experience of the group - what are some of the most important questions that we in our naiveté are likely to completely overlook? As always all advice appreciated!!
Also make sure the zoning is covered - just because it is a B & B NOW does not mean it can be a B & B if sold. When we adopted zoning in my City, anything already there was grandfathered in BUT could not remain as such if sold without a variance or conditional use permit if it was a non-conforming use.
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I do know from reading the forums that you'll need a list and photograph everything that will be staying with the inn. There are some that arrived to take over and found even light bulbs gone, and instead of the carpeting and furniture that was supposed to be there, found cheap replacements.
I think what most recommend is once you have decided on an inn to request a walk through and take a video camera so you can video and have their voice confirming what all will be staying with the inn.
And as we see with Morticia's post, a list of valid gift certificates still out!
RIki
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Riki Goodell
Arcady Vineyard Bed & Breakfast
Arcady Vineyard Wine Tours
www.arcadyvineyard.com
Come! Let us show you the beautiful Monticello Appellation!
Also ask about all the web site rights and all the stuff connected to that (Swirt is better to ask) but I remember when a big hotel I worked for sold it was a complete pain to get it all transfered.
What competition is there in the area? anything that competes directly with you? or is it very different accomodation providers?
What is the neighbourhood like? is conductive to B&B guests? also any problems or trouble with the neighbours? ie should you wish to develop?
I forget who it is who has apauling neighbours so it is something to consider. Also proximity to neighbours I have trouble with my next door neighbours guests sitting out on her balcony at night talking as the sound really travels so wakes me/my guests up.
Local things that attract people ie college graduation/ town events are there any town event web sites to get an idea from?
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Don't mess with me today or I will kill you!!!!
Hey! I was just re-reading all of these and thought I'd already posted a thank you for this advice but it's not there so - thank you! We're flying out on 9/9 to take a look and I hate to fly so I'm nervous...
Have a good trip and keep us all posted!
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A better way to a getaway - call an Inn-sitter!
Welcome back!
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Emily Spiers
Professional Association of Innkeepers International
emily@paii.org
It took us 2 years from wishing to researching to actively seeking and becoming innkeepers. We had talked "wouldn't it be fun if" and "we could do this" . We're still glad we did - we're coming up on our 3 year anniversary!
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If buyers saw the value of our inventory list they would throw money at us. In fact, by my giving this to them, they realize (hopefully helping the rest of y'all) how dang much all of THIS costs!
On the other hand, after having read a line in a book that made my stomach churn (since we are for sale) those looking for 4 or 5 years are not serious. Many who want a walk through are these such non serious, rose colored dreamers. If you want to be an innkeeper, you do it!
So that advice is given by way of saying don't get your hopes up on those who are wishy washy and spend 4 or 5 years paddling around looking at inns. We ARE an impulsive bunch, get the attention of those who are starting to feed the dream!
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Kindness not only makes the coffee. Kindness says good morning.
Definitely ask the where do your revenues come from. I do not know if the farm will still do the overnight stabling if I sell. That is a question I will ask them when the time comes to put it on the market. In the meantime another stable facility may actually open (someone has been talking about doing one - but it IS somone full of BS!).
Our For sale package includes a specific exclude/include list as well as some general occupancy and revenue/expense numbers for the last three years. These are given out to serious prospects only. You can't NOT provide some general information to help buyers determine if they would like to move forward after seeing the Inn.
Be sure to ask where the current owners advertise, and what their advertising budget is. Why do their clients come to the area (to do what?). Is that a fit with your style? Where does the bulk of their business come from. and in what percentages? You would hate to find that one attraction or business sends most of their clients, only to find out that entity is going out of business, or some similar disaster. Likewise, you would hate to have purchased a romantic retreat only to discover that you hate having guests underfoot all day because they never leave their rooms. Be sure to read online reviews for the properties you're interested in, too, to get a feel for their reputation.
And the most important question? Will the current revenues pay for the new mortgage on the asking price?
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The reason a dog has so many friends is that he wags his tail instead of his tongue and gives kisses freely and enthusiastically to everyone!
Will the current revenues pay for the new mortgage on the asking price?
Ha Ha...do you think they actually would tell them if it would not????? Of course they could look at the books....if they kept good records etc. But as we all know people do lie. 
Will the current revenues pay for the new mortgage on the asking price?
Ha Ha...do you think they actually would tell them if it would not????? Of course they could look at the books....if they kept good records etc. But as we all know people do lie.
That's a question only the buyer can answer with the relevant info in hand. And by due diligence. (which is lawyer-talk and broker-talk for 'Cover your own butt, we're not going to.')
The seller doesn't know what the downpayment is. The buyer may just pay cash. May finance half or more. Or may not even be able to get a loan! (Pre-approval. I will be demanding pre-approval for any lookie lous.)
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Spare me the perky.
Ditto on that Mort
Take photo's of everything as some friends of mine got had when they bought as the previous people switched out all the good appliances etc with crap old ones and it cost a fortune to get fixed. Also at least sit on all the beds as we got caught a bit that way when we bought as the mattresses were down to the springs so we had to buy all new ones which cost a fortune.
I created my B & B so did not have questions to ask, BUT I am planning to put mine on the market in the next year or so and since I plan to only take my personal items (unless there is something they do not want) I would think a list of what they are getting as furnishings, linens, etc would be in order. In my case a list of what I am taking from the B & B side would probably be shorter. Siver, dishes, goblets, appliances, furniture, linens.... In addition to the questions already noted but those who have purchased inns.
I think it is a bit early to be asking for a list of items. This will only be their first look. Most innkeepers will not provide that kind of information unless a person is really serious about purchasing. That at least has been my experience.
I think it is a bit early to be asking for a list of items. This will only be their first look. Most innkeepers will not provide that kind of information unless a person is really serious about purchasing. That at least has been my experience.
I'll disagree with this one. Here's why...IOMH may decide to make an immediate offer. If they do and THEN find out all the furnishings 'belong' to the owners, they are in a bind. We looked at a place twice and on the first go round everything was included in the price. The second time we showed up, ready to make an offer, half of the furnishings, all of the dinnerware, dining room pieces, etc were leaving with the sellers. Right there it meant we could not have guests booked in until we bought all new furnishings. And you know you don't want to buy furnishings and then have the deal fall thru.
If IOMH has been pre-approved for the purchase price (and no one should get in the door unless they are), they should be given all the details they need to make a decision. Now, they may say they are not interested in a property for whatever reason, but if there is intent, they should have the tools to make the decision. Especially if they are looking at multiple properties in one trip. Like JB said, photos! And it helps to have a checklist as you walk the property. 'This stays' and 'that leaves' are important when doing the tour because you develop a sense of what the place is like based on the furnishings.
One thing we hated was the sellers & the brokers dragging their feet to give us info.
I agree with Mort. An inventory list is a really valuable tool for prospective buyers to have. If the sellers are taking away major equipment (riding mowers, some appliances, major pieces of furniture, etc) then it can definitely affect the offer price and the transition from one buyer to another.
It's a pain in the neck to have an inventory list, but even if you aren't selling it's a good idea just for insurance purposes.
It could be an easy list, too...only the things that aren't staying, if that list is shorter.
Which brings up this thought...check with the town if there is a business property tax and check what is on the list. We got hit with a biz property tax that included some very high end items that we did not get in the transfer. We got those items removed from the inventory list but were peeved that they were removed from the property as they were not on the 'leaving' list. And you just cannot remember everything!
Rxcellent point. We DO have business personal property tax - which is why I do NOT claim linens or anything else I buy for the B & B on my taxes. We fill out our "what I have so you can tax me on it" form as of July 1 each year and must file that form by October 1 WITH your Schedule C so you do not cheat them. Then you get taxed on it every year minus a 10% depreciation. That is why I did not claim my custom-built $100 tea hutch. I do not want to pay taxes on it not will the next owner pay taxes on it - and it and its companion sideboard (another $900) will remain with the B & B. They take my food deduction and divide by 12 to determine what food I had on hand on July 1 so they can tax that.
1. Verify they are in operation legally, which means a trip to the town hall or proof of licensure. This includes being able to operate at all but also includes them not exceeding the max occ by renting out 'secret' rooms. Or providing services (like lunch & dinner) that they cannot legally do.
2. While at the town hall, verify there are no 'grandfathered' regulations that you will be required to meet that the PO's did not. ie- fire safety regs that have changed, kitchen requirements that have changed, maximum occupancy.
3. Whatever numbers you get, ask for the raw data, too. 90% occupancy rate? Is that for 12 months or 3 months? Do the innkeepers take any time off? How do they do that? (Close down, hire innsiiter?)
4. Ask the innkeepers what one thing they would have liked to try but never got around to that might bring in more biz. Lots of innkeepers have great ideas for their area, but never get around to doing them.
Wow, hard to put it into 2 questions which you may overlook.
Since we are for sale, and also bought this B&B many years ago I can tell you what we did not get and what would have been helpful. So these things I have ready and send to any inquiries.