Owning a bed and breakfast is one of the most commonly held life goals; the dream of those who long for a better quality of life and the chance to be their own boss. Who could want for more?
Securing the mortgage for a B&B purchase is rarely easy, but it’s certainly not impossible – our case studies are proof of that. If you’ve been asking yourself: “How do I finance a B&B?”, the following insight might help.
Continue reading “How to finance a bed and breakfast: your questions answered”
Fed up with your stressful city job? Approaching or beginning your retirement? Or maybe you’re just a dreamer who wants to ditch the day job and start working for yourself? Well, if this sounds like you, then you’re far from being alone and as such, you might be interested to learn that there’s one route which increasing numbers of people are opting for: buying their own bed and breakfast.
Continue reading “Why owning a B&B can be a dream come true”
We were instructed by a client in East Sussex who had been with her bank for over 40 years. She purchased a house in a popular tourist town close to Brighton in East Sussex with a regular residential mortgage but after moving in she decided to let out two of her three bedrooms as B&B accommodation. She traded well and paid her mortgage every month, unfortunately the bank then realised she was trading the business and as her mortgage was not a commercial one they called in her loan due to a breach of covenant.
Continue reading “Getting a Commercial Mortgage is not always easy!”
It’s good news for the British hotel sector. After a buoyant 2015, forecasts by PwC for 2016 suggest that UK hotels could expect revenue per available room (RevPAR) growth of 2.3 per cent in London and 4.2 per cent outside the capital. These rates have increased consecutively for the last seven years in London and four years in the Provinces, so setting up a hotel right now could end up being a lucrative endeavour.
For many, starting your own hotel is a dream come true – perhaps the realisation of a long-held ambition and the chance to escape a humdrum existence. Others, while working at someone else’s establishment, may have vowed to have their own hotel one day.
It’s a superb life style choice and one that, done well, can provide job satisfaction and financial security. There are, of course, many things to consider before embarking on your new life. In our many years of providing finance to the sector, we’ve seen it all and thought we’d share some of our insight. Here are a few basic yet important tips for anyone who is thinking about owning a hotel for the first time.
If you plan on opening or purchasing a bed and breakfast, hotel or guest house, it is vital to weigh up the potential risks you will have to deal with, including seasonal demand, competition and the economy. The lender you go to for finance will certainly consider all of these factors and take them into account, not only when deciding whether or not to lend to you but also when deciding on the rate. Naturally, if there is a higher risk it will cost more to get the funds you need. If you want to lend at the lowest rate possible, you need to show you have planned effectively and will be able to minimise risks. Continue reading “Convincing lenders to get behind your idea”
The single most important thing to consider whenever you start a business, regardless of the sector or the scale of the operation, is whether or not it will be able to make a profit. Profitability is essential or the enterprise won’t be sustainable and will quickly encounter difficulties. You’ll also struggle to attract investors and financial backing if you can’t provide evidence that you will be able to deliver a return. Continue reading “Never underestimate the importance of a location”
When you begin your search for the perfect hotel to buy, it is important to take a proactive approach. Nobody can find the right property overnight, but by actively looking and maintaining contact with agents you can give yourself the best chance of investing your money wisely. By regularly communicating with agents, you will increase your exposure to hotels that meet your requirements when they become available. Continue reading “Be proactive in your search for the right hotel business”
There are various financial issues and problems which can strike hospitality and accommodation businesses, and although it is important to take steps to safeguard your business, there are times when you may experience problems which are beyond your control. For example, many business owners have been mis-sold financial services and products in recent years, and this can be a challenging problem to rectify. If you have experienced this, our hotel finance specialists are here to help. Continue reading “Recovering from mis-sold finance”
Opening a bed and breakfast is a major commitment which requires extensive planning. It is essential to look to the long term and carefully consider the upfront cost of starting the business. It could take a few years before you break even, but with a successful plan and a quality business offering great facilities, you have the potential to achieve great success in time. Continue reading “Understanding the upfront costs of owning a B&B”
