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Tempted to start a B&B


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Hi

After 3 years here getting used to a new life in France we are on the move.

We have seen a property thats ideal for B&B or to let as self catering apartments (or both) but one of the few negatives is the yearly taxes, we are looking at about 2500 a year minimum, foncieres are 1400.
Are these taxes about the norm for properties big enough for B&B, its in a village, mains drains etc.

Also setting up as a business, which way is the best way to go, someone mentioned SCI, any info on the tax situation would be nice.

Any info appreciated.

Cheers
Lee

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How long's a piece of string really Lee?  What do you regard as big enough for B&B?  Your own accommodation plus 2, 3, 4 or 5 letting rooms?  Also, it would depend where your property is, country or village doesn't necessarily give much of a guideline as to the costs, apart from the fact that IN a village will probably make it more expensive.  For example, my parents live in the same canton as me but in a village on mains and pay around 600 euros per year for hab and fonciere, we have a similar sized house, with about 1/4 acre more land and yet our combined bills are 300 euros.  And yet I know of people living in Herault who are paying about 3000 euros, again for a similar sized property to ours.
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Understand the how long is a piece of string, just would like some info of experience of setting up this kind of business.

Was looking at maybe 2 2 bed apartments and 3 B&B rooms along with our accommodation, but has a good location of being on the river and next to a chateau but its not a big touristy village so not a mad busy place.

I know there are many many CDH and I know a lot of people come over with a view to doing this but its just that we have seen this nice property and by buying it would just be on the basis that we did B&B with it, I have some doubts with getting enough to pay the yearly taxes and having a little to live on and if we sold it on the taxes might put prospective buyers off.

Lee

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France too many is an ideal place to move to. Many have seen the idyllic way of life that others enjoy on TV programs and feel that they also would like to improve their quality of life. The problem is then what can they do to earn a living.

A seemingly obvious solution to many would be to open a B&B so many wake up one day and think, "Let's open a bed and breakfast! It will be fun to entertain guests in our home. We cook and clean ... we can do that!" But many times people don't take into account the business side of running a B&B. While they have enjoyed staying at B&Bs and have experienced the relaxing side of the B&B environment, they haven't seen the inside view of this people intensive industry, the mound of office paperwork, the constant interruptions during the day, and the piles of laundry waiting to be finished.

There are many issues to consider when deciding whether the B&B business is for you. The bed and breakfast industry is a very personal one, personal because B&B hosts spend a lot of time with their guests and must be very involved with every facet of daily business operations. This deserves careful consideration.

As our fellow B&B owners already know, the daily routine of an owner combines early rising, cooking, cleaning, shopping, laundry, banking, bookkeeping, advertising and marketing, check-ins, reservations, management, and more! Trading the office’s 8-hour, 5-day-a-week job for a bed and breakfast can seem like a great alternative, until the realization becomes a 7-day-a-week occupation with 12-18 hour workdays and an office you can't leave behind.

But being a B&B owner does have its up side, too. Meeting friends from all over the world is like being an armchair traveller. Acting as a "goodwill ambassador" by helping guests with travel and activity plans can be very rewarding. Showcasing the home you have worked so hard to build or restore is a great personal benefit. The freedom of owning your own business also gives you the pleasure of not answering to anyone but yourself and your guests.

It is very difficult to give any idea as to how financially successful you will be with your business without researching the property, the area, competition etc. Some say even with five rooms you can’t make living and require a second income. More to the point the B&B provides the second income to the primary. We operate only four rooms but thanks to our research and help from this forum we manage to make a living from our modest enterprise.

There are other things to consider like picking the correct business partners who provide services more specific to your area. Working with the local community can also help. We for instance take migrant works via the DDE during the winter months which dramatically increase our occupancy levels. In the end it’s really down to you and how much you are willing to invest time wise and where you want to take your business and what you want to do with it at a later date.

Good luck.

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Cheers Quillan

Can anyone shed any light on these q's

Are these taxes (tax fonc 1500, tax d'hab ?) about the norm for properties big enough for B&B, its in a village, mains drains etc.

Also setting up as a business, which way is the best way to go, someone mentioned SCI, any info on the tax situation would be nice.

Basically any tips on working the tax system to benefit this type of business.

The property isn't the usual renovated rural farmhouse where you may struggle to get any guests, its an old hotel currently split but we would do B&B as well as self catering.

 

Lee

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Hi ChezShells

Your questions are tough to answer, on my last property which had  2 largish houses our fonciere was 1100 euro but habitation was low because we had a low income, as others have said it is dependent on the area, I think ex Hotels are rated quite highly I know I've seen some for sale that have been high.  If you go on a good french immobilier site they quote the fonciere and habitation per house, this could give you some idea of the 'usual' costs in an area, I believe Century 21 do quote these figures.

An SCI I believe (I'm no expert) is only for property transactions, this kinds of set up is used for multiple buyers or to avoid inheritance issues, it's all about the purchase of property not the ongoing paying of taxes for a business, for this you would need to look at the micro or reel regime I believe, do a search on these terms, lots has been discussed on this before. 

We would all like to work the tax system, unfortunately it generally works us, tax is not the issue but cotisations are and if you need staff to run your B&B then that could be crippling in charges. 

You haven't said what the current turnover of the place is, this for me is the important bit, if the property taxes are only a fraction of it's current turnover then they are irrelevant, you should concentrate on working out what you potential income is rather than the tax burden in my opinion.

Panda

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Cheers

The building is empty, was a hotel long ago (marks of old sign lettering on the building) but an agent mentioned as apartments they said it could get 17k per year (total) but we are thinking of splitting it up a little for B&B as well as the apartments.
We have other options with other properties but this one would have to go down the B&B route rather than just a home.
I think maybe because its in a village that may be putting me off (came here for the rural life I think) but as well as that is the fact that if it didn't work out would it sell!

Potentially it looks great on paper.
Decisions decisions

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I would have a long hard look at demand in the area. Ring up half a dozen local B & Bs and see if they have space in July and August and how fixed their prices are.  Do a proper estimate of how much it costs to renovate and equip. The property market in Fracne is a lot slower than the UK. A number of the large houses which we looked at almost two years ago are still for sale.

 

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Depending upon your circumstances, the Taxes d'H and Fonc. may be the least of your worries as far as outgoings are concerned.

A lot will depend upon whether this is your only or main (more than 50%) source of earned income. If it is, then you will have to register your business (usually as an entreprise individuelle) at the local Chambre de Commerce.  Even if it isn't your main source of earned income, if the expected income will be more than 27000€ then you will still have to register.  Once you have registered, which you will have to do probably before you start trading - i.e. before you start advertising - you will start to receive regular demands for cotisations - health, social security and pension. Later on you will also receive demands for social charges and Taxe Proffesionelle. In your first year you can expect to be paying out at least 3500€ on these cotisations regardless of your level of income. Depending upon the tax régime that you choose and whether you make a profit or not (only if you are on the réal - on the micro you will pay tax on 32% of your income regardless of whether you have made a profit or not) you will also receive a tax bill sometime the following year. If you do well in your first year then you will be rewarded by your cotisations increasing significantly in your second year.  It is possible to defer cotisations for the first two years but then don't forget that these amounts will still have to be paid in years 3 and 4 on top of the cotisations for those years so maybe not too good an idea !

If you have another main sorce of income and the earnings from the b&b / apartments is less than 27k€ then it will all be much easier and you won't need to register. You'll only have to declare your earnings on your tax return each year.

Registering a business is a fairly simple matter but it is well worth getting professional advice from a French accountant first to make sure you make the right choices, particularly with regard to choice of tax regime. Most accountants will save you more than their annual fee.

You will also need to get a Class I or Class II license from your local douanes office to enable you to serve coffee (Class I) or table d'hote evening meals with wine included (Class II). The license is usually either issued free or just for a nominal charge, and is issued on the spot if you visit in person.

My advice would be to draw up a business plan with cashflow projections, consult an accountant to check out your expected liabilities and see how it all works out. As Quillan has said, it is perfetly possible to earn a living from a good b&b business but you will find it hard work.

Please let us all know what you decide to do.

Good luck.

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[quote user="ChezShells"]

 but an agent mentioned as apartments they said it could get 17k per year (total) but we are thinking of splitting it up a little for B&B as well as the apartments.

[/quote]

Of course they wouldn't they? [6]

As other posters are telling you do some serious market research. I'm not saying Agents are crooks but they will always quote the maximux expected potential and without any up to date accounts there is no way of proving that figure.

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Benjamin
To be honest, I see more potential in it, its just if I can be bothered (you'd have to know me on that one!)

Had some good info from a couple of people I know with B&Bs.
Plenty to think about, many might remeber my post ages ago about going back cos we're bored (and skint), my next one might be going back cos I cant hack all the hard work!

A viewer for our house recently asked what I did, I said nothing, he was made up and asked for an application form, might be best sticking to what I do best!

Lee

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In a previous incarnation (many moons ago) I had a pub here in UK, a similar service industry to the B&B market.

Let me put it this way dear friend.   Having run the pub as single mother when the ex couldn't hack it any more, I gave it a motto.   "Being nice to people you hate...."    If you can't face the idea of this then don't get involved.

Another fact is that my hubby and I have friends out there in France who run a successful upmarket B&B already, but after three years they are physically and mentally drained by it and are contemplating making this their last year.   The place is currently on the market.

It may seem to be a good way of earning a crust but it is a very intense experience which can rip you to bits in the process.

1. you are always at someone's beck & call    and     2. your place is no longer your own private haven.

Think very long and hard before you go ahead and make sure you check out there is a market to support it locally.

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  • 4 weeks later...

Just an update on the situation

We went on holiday to Greece for a week and returned to find out someone had their offer accepted for half of what it was when we looked at the place.

Someone got a bargain, 6 large apartments on the river (literally) for 75k euros!!

Gutted
Wasn't someone on here was it!

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I do not think that it is fair to think that people buy a property, move to France and open their doors with the idea that money will roll in for B and B.

I HAVE STAYED in many places all over France where the sheets are past frowing out time, the towels  are lacking in quantity and not changed and look and feel like grey typing paper...lack of toiletries, lack of natural light, shabby interior design.Breakfast ...everything courtersy of the freezer and supermarket.Ok 60. or 70 euros  a night...staying 3 nights...money for old rope.I would prefer to pay more and get a good exsperience.

Come to FRANCE and enjoy France....add to the comunity and show everyone that you are enjoying being in France.Use local produce...use imaginations...make the gardens, house and room delightfull.

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[quote user="Dee"]I do not think that it is fair to think that people buy a property, move to France and open their doors with the idea that money will roll in for B and B.
I HAVE STAYED in many places all over France where the sheets are past frowing out time, the towels  are lacking in quantity and not changed and look and feel like grey typing paper...lack of toiletries, lack of natural light, shabby interior design.Breakfast ...everything courtersy of the freezer and supermarket.Ok 60. or 70 euros  a night...staying 3 nights...money for old rope.I would prefer to pay more and get a good exsperience.
Come to FRANCE and enjoy France....add to the comunity and show everyone that you are enjoying being in France.Use local produce...use imaginations...make the gardens, house and room delightfull.
[/quote]

Not sure about this reply, Admin - frow it away!

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ROFL [:D][:D][:D]

I do know where Dee is coming from but whilst I have seen lots of grotty gites and B and Bs in real life , most of them are not British owned.

Having nosed at a lot of websites on here [geek] the standard is generally very very high, I think most Brits tend to think along the lines of 'would I stay here myself ? '

rather than ' I've got a barn with no cattle and my gran's sheets ( shroud) going yellow through lack of use since the 1960s'.

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[quote user="ChezShells"]

Beryl, whilst the previous post may well contain valid points it was off topic and led more towards the 'English coming here dreaming' brigade.

Thats how it came accross to me anyway. Maybe I missed something, sorry.

[/quote]

 

As the subject of your original post has now been sold (and not to you) , there is no topic [:P]

BTW I was laughing at your response about 'frowing it away'[:)]

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