Buying an up and running B&B

[Adele]

Hi, we have been offered a house in Normandie which is already being run as a B&B, it has it's own website which would be included in the price, however, I am not fully aware of what we would have to do legally to purchase this house and carry on running it as a B&B.

We are debating whether to sell our house in the UK and buy the B&B outright or rent out our house in the UK and get a mortgage for the B&B.

Would we have to go through their estate agent or can they sell direct to us?

Any information/advise would be much appreciated.

 

[BJSLIV]

It depends on the agreement they signed with the agent.

 If they signed an exclusive agreement then they can agree a price with you , but the agent will stil want his fees from them. If they signed a non exclusive agreement and you have not been shown the property by the agent then you can do a deal direct. If you have  already signed a viewing document with the agent  once again he will expect his fee from the vendor, even if he is not involved in the negotaiations from now on.

[Adele]

Thanks for such a speedy reply.

We have arranged anything, it was kind of mentioned that they had it up for sale and I happend to show interest.  Initially as an investment but now looking at it being our main source of income.  It has 5 bedrooms and a 2 bed self contained annex which needs finishing.  We plan to pop over and stay there in March to get a feel for the place first before we even think about the legalities etc.

I have seen internal pictures and the rooms don't look to be en-suite, would this be a major draw back in a B&B?  I think this reflects the price charged per night but I would have preferred en-suite rooms.

They also do gardening and caretaking work which they have said could be passed on to us which should provide a small income along with the B&B, but I don't know what sort of outgoings I would be looking at until I see their accounting books.

Do you think it is a worthwhile venture or a huge risk?

Would you sell up and buy outright or rent out current property as extra income?

It is a huge step and in late 30's so not sure whether I could handle having to come back to England and start all over with very little.

[Autismuk]

I think it will not work. Sorry. It is not an "investment" unless it makes money.

You have 5 bedrooms, not ensuite (which will not help your take up) - unless it is high tourist area in Normandy, what sort of income are you expecting ? 5 beds at £ 40/nt x 330 days per year (one month off).

Thus with absolute maximum occupancy you will make £ 66,000 - before costs are taken into account and you will not get anything like maximum occupancy - unless it's actually on Mont St Michel or similar. Where in Normandy *matters* a lot - there are many really nice areas of Normandy which simply aren't that touristy - most of Eure and Orne for example.

The fact that they do "gardening and caretaking work" suggests they aren't run off their feet (and everyone coming to France looking for extra income is after the same sort of work....)

Out of interest, is this the Brionne one that's been on the market for a while ?

It'll be worse than their books because of the mass of people moving to France "to open a B&B or Gite complex". The number of tourists will not increase to match !

You absolutely *must* get a look at their books. And get someone who knows what they are talking about to look at them (assuming you are not).

Financing.

Rent your old property if you can, but you are going to have to buy the house (what value is on the business ?) and I'd be surprised if someone loans you the money for that. I wouldn't. Sorry, but I wouldn't. It's nothing personal.

Why are they selling up ? If it is such a good deal - why sell it ?

It may be possible to make it work. But be *very* careful.

[Adele]

Thanks for your response.

The current owners are now running a bar in Tenerife, their parents are still at the B&B and running it until such time as it is sold.

This B&B is located in BAUPTE

I have no idea whether its a tourist area or not, I only know that it is a small place with only 1 pub, baker & post office in the area.  The house is on the market for €200,000.

They do offer an eveing meal if the guests request one at a cost of €15 per person for a 5 course meal.

 

[Quillan]

[quote]I think it will not work. Sorry. It is not an "investment" unless it makes money.You have 5 bedrooms, not ensuite (which will not help your take up) - unless it is high tourist area in Normandy, what ...[/quote]

I think 330 nights is very over optomistic really. An accountant would typically look at it like this.

5 rooms @ 40€pn (if it's the one that comes up when you do a google search) = 200€ multiply by 7 for the week = 1,400€ and an accountant would work on a 10 week season which will generate an income of about 14,000€ per anum (thats about £10k pa). The reality is you will probably do around 20,000€ of business. There are lots of B&B's in the area, just search on google and thats just what you will find on the internet. Try B&B Normandie and do an advanced search with both words and only in English, 32,200 answers come up (as of 03/02/05) and if only half were correct thats an awfull lot of B&B's.

There are very few people who can do this full time and not have to have another income of some kind and it's obvious that the present owners need a second income as you have already said so.

I would strongly suggest you look through all this section, there is some really good stuff here before doing anything. You should also be aware of the hard work involved in doing this as a job. A publican friend of mine said he would rather run a pub than do this sort of thing, it was easier, shorter hours and less stress. One very important thing is have you ever lived 24/7 with your partner/husband, there are a lot of people that think they can but after a year...........

[Autismuk]

I wasn't suggesting they'd get 330 nights ; that was an absolute maximum ; though a 10 week season is a bit pessimistic ; OTOH it's probably a good idea to be pessimistic.

Baupte is just west of Carentan, so it's not too badly located. It really depends on you guys ; you mightn't make a living out of it itself, but you might survive on that + others. Depends how cheaply you are prepared to live ;-)

If you want to do it, good luck. At Eur 200,000 it's not extreme for the house by any means - a bit up maybe..... depends if it is "all in". Nice area, nice looking house. Might be a market in ferry overnighters from Cherbourg as well.

Just don't expect to live like royalty

Read the books carefully.

Could be a bit of expansion, the website is a bit basic for example, the photos look a bit grim as well.

[Russethouse]

If you are going back I would have a very good look at the possibilities of making those rooms 'en suite' (even at the expense of 1 of the bedrooms) Sharing a bathroom is a major no no for us, and I guess we are not the only ones.

[Miki]

.......and the rooms don't look to be en-suite, would this be a major draw back in a B&B?  I think this reflects the price charged per night but I would have preferred en-suite rooms.

Rooms without ensuite facilities are a bit of a no, no as Gay has said. All rooms really should be ensuite. It is not just a reflection in price that matters, it will be reflected in the amount of bookings you get as well. The price can only be decided by you, many factors apply, any major or minor works, redecoration, new beds, new linen, new just about everything etc. The way to judge is to view as many as your head can take, how else are you going to know its value ?

Books, well not so important, as I think Hans Christian Anderson accountants are often at work but still take a look and them, then add a lump for the cash he is hiding (they will probably tell you anyway to impress you about the cash bit and if they do, then take away half of that amount to arrive closer to the real figure !!)

They also do gardening and caretaking work which they have said could be passed on to us which should provide a small income along with the B&B, but I don't know what sort of outgoings I would be looking at until I see their accounting books.

If they have time to do all that during the summer then their B&B is not doing that great, either that or one of them is hyper fit ! There is no guarantee that any of their previous clients will cary on with you so when the sale gets serious, contact them all to see who will stay with you.

Do you think it is a worthwhile venture or a huge risk?

Huge risk and if you took out any kind of credit, you seriously may live to regret it. The art of survival in the kind of business you speak of, is NOT to take out any loans

Would you sell up and buy outright or rent out current property as extra income?

Now renting out current property makes more sense, you then have a safe bolthole but will you then give it all in the new business knowing it would be easy just to walk away from it ?

It is a huge step and in late 30's so not sure whether I could handle having to come back to England and start all over with very little.

Think long and hard, take in all the advice you can, then do more homework, you will hopefully know which place is right but it is difficult for anyone on here to judge your chosen house. I always went on gut feelings, reading through the lines with the books and location (as important here as on Channel four !) when buying here.

Good luck...oh yes, forgot, very often luck counts for 50% as well....

[letrangere]

Adele, I've been toying with replying since I first read your posting but didn't want to respond straight off sounding so negative.  However, having given it more thought I must say that my firm belief is you should walk away from it.  Gay's right about the en suite, absolutely essential these days, so you have another new (and quite hefty to do it well) expense before you've even seen the property.  What I find interesting is your perfectly understandable comment that you don't know if you could face starting something else if this didn't work out.  I can relate to that.   

Why not buy a small place somewhere nice for holidays, get to know an area well, give it a few years and then see how you still feel about a) living in France permanently and b) the idea of running a B&B, both of which are huge commitments. 

M

[Autismuk]

[quote].......and the rooms don't look to be en-suite, would this be a major draw back in a B&B? I think this reflects the price charged per night but I would have preferred en-suite rooms. Rooms wi...[/quote]

By the books, I mean not just the accounts but the booking diaries, letters, bills, receipts and anything else you can get your hands on that shows how much money is flowing about - in both directions, in and out.

There's probably too much competition to go for non-en-suite. But I don't know if losing a room is practical within the designs of the house ; you might be better off starting from scratch !

A few years back you could let almost anything as a Gite Rurale ; these days the competition drives quality up and prices down. It is a buyers market.

If someone locally offers a B&B with ensuite at not too much more money, they'll get much of the custom - also anyone cutting finances down to the minimum probably won't eat meals at the B&B either.

It's noticeable as well on the website that there appear to be umpteen pictures of the outside, but none of the interior - at all.

There's photos of the village and so on, but none of the bedrooms. It looks much like any Normandy village to me. There are umpteen pictures of the house from the outside and the local village, but nothing of the interior. Wierd.

Question is, for me, why don't they show what the bedrooms look like ? Especially as it claims to have been newly decorated ; why wouldn't you show people a picture of this ?

Another issue is if you want to work on it, can you do it yourselves ?

Sure, if you are interested, go see. Think to yourself, would I want to stay here ?

Just don't sign *anything* !

There's one advantage to all these negatives. The owners are probably well aware of it and are pretty keen to sell. There's probably a fair amount of money gone into it. You may be able to screw them down (sorry, but that's business !) on price.

In that case there may *possibly* be a scenario whereby the rental on your own home (depends where you are, only you know the answer to this one) could pay the loan on this house and provide some left over, which you could supplement by some income earned elsewhere as the owners do.

[Autismuk]

An off the wall idea coming up !

At the moment, they don't run the business, they are in Spain doing something else, it's run by their aged P's, right ?

If you are keen to try it, you could consider (and this is off the top of my head so there might be massive reasons this is a lousy idea) you running it on their behalf and them taking a cut of the profit (or whatever), or even all of it, or pay them a flat amount. The latter might appeal to them as it's guaranteed income, whereas at the moment they don't have any.

Effectively they lease you the B&B & business for the 2005 season. A bit odd, but I suspect they are in "just ticking over" mode waiting for a sale.

That way you could rent out your current home to provide some income, try out the business and hopefully have enough to live on from the rental (if you squeeze your lifestyle a bit).

You could do one season ; then it would give you a much better idea of the strengths and weaknesses of the place, how much work is involved, what the income is now, and how (possibly) you could increase it, and so on.

You'd also find out if you actually want to live in France.

Then if it all falls apart, or it is a hopeless non-starter, you can return to your own home slightly poorer maybe but wiser If you then want to try it somewhere else, you'll have learnt masses.

If they are keen/desperate to sell, or the aged P's are keen to go home they might agree to it. Difficult to judge without being on the ground there.

Have to think some more about this idea :-)

[Cerise]

As someone who has done what you are thinking of doing, I have to say if you need to borrow DON'T DO IT.  We sold up in UK to buy here (in our forties) and although things are OK we can only get by because we don't owe any money.

Rooms without en-suite are a no go area.  Once you start putting in bathrooms you'll probably notice it needs re-wiring or something like that and end up spending twice as much as you thought (you'll do that anyway).  You would have to build up a clientele, which takes time, and if the place has been closed for a while there may not be any existing trade.  If you really like the property, get an objective friend and a hard headed builder to come round with you and say exactly what needs doing, and how much it will cost, before you commit yourselves.  It's always worth asking for some money off if they are selling as a B & B on the grounds that it needs updating.

I think Quillan's estimate of 20000 euros is realistic and don't forget you have the running costs associated with a large house - heating etc.

It is very hard work, but we enjoy it, so no reason why you shouldn't too.

Good luck

Maggi

 

[mascamps.com]

We're almost all ensuite and thought that nobody would take the rooms with the shared bathroom so didn't even bother listing them initially. However, we have found that they are saleable and we did pretty well with them once we listed them.

Having said that, we are intending to make at least one of them ensuite but that's more because a) we can charge more and b) those that stay in the non-ensuite have tended not to take meals (or even breakfast) with us thus dropping the income from them considerably. We have tended to get a different type of person for them: mostly backpackers, who rarely book the other rooms.

 

Arnold