Chambre d'hote V Gites

[Derkins]

   Question for anyone who has done both, which is the hardest work? Which is the most profitable?

[Miki]

Chambres d'hôtes with 4/5/6 bedrooms can earn a really good income if

the area will take a decent nightly rate and be in an area to ensure

good occupation figures for around 8 months or so.

Gîtes will require excellent marketing, a good website ( the same as a

good B&B will require) and as before, a well placed situation. The

cottages will need the rooms to take the  big money but many rooms

mean kids, kids generally mean school hols, school hols means limited

reservations due to dates. Large  gîtes with many rooms can also

recieve large groups, so school hols may not interfere with that kind

of booking.

To generalise, as it is impossible to give you the full picture on a

like for like basis, there are too may other circumstances that come in

to play...B&B is certainly harder but the financial reward of a good

B&B table d'hôte  in this instance say a 5/6 bedroom against a

similar set up with a cottage will give you a better annual turnover

but as said, you will earn it !

Ideal place with money no object would be, say 4 gites or more, near the sea or in a very interesting region,

very good inground with up to date security, swimming pool, lots to see

and do in the region and the complex having plenty of extras for people

to be entertained. Not cheap of course !

Two people cannot efficiently run this kind of place alone, some will

say, they do but, I know from experience that it will not be for that

long. The place I talk of here will be heaving for a few months and

perhaps still turning over quite nicely in the shoulder and out of

season months. It will be tough (not as tough a B&B set against

each individual gîte of a comparable size) and will wear even fit

people down, especially during the hot summer months.

Take your choice, money as ever will play the major role in the purchase and as ever, the more you pay, the more you should be able to earn.

[betoulle]

We have 2 gites & 4 B&B rooms in our house - the supposedly ideal & manageable formula, but during the summer months doing them both almost kills us on a Saturday....  However, to answer your question if its one or the other then the gites we feel are probably a slightly easier option as it is only 'hard work' on changeover day - once the clients are in then there is little to do, but you need to be on hand 24/7 to deal with problems (light bulbs, gas cylinders, snake &/spider catching, washing machine, fridge, microwave breakdown etc) as well as constant outdoor maintenance, pool cleaning etc  The marketing is hard work & expensive, but usually done 'off season' & every winter is spent redecorating, changing furnishings etc............. The secret is to aim as high as you can in the quality & service you offer to your gite guests & they will reward you by returning year after year & spread the word. It definitely brings in more money than the B&B, but only between Easter & October if you are lucky.  We enjoy the B&B as it is year round so you are not limited to a 5 month 'busy' period, but we tend to get very few guests between Nov & Easter - Murphy's Law they will always want to come during your busiest time......we also get a mix of nationalities in the B&B - approx 50% are French who do return year after year, but the majority of Brit B&B guests come once & never again, no matter how high the standard is.  The washing & ironing & cleaning not to mention the breakfast & any cooking is a killer - especially the one nighters - we had 2 weekends recently when we had 23 & 28 people checking in & out over the 2 weekends - the last w/end I did 18 loads of washing in 3 days & ironed for hours.........In our situation the Gites are the core of our business, the B&B is back-up.  We will never make a profit, but so long as we approach breaking even we will continue, but as Miki says probably not for more than 7 yrs.  I would definitely do gites again, so long as we can find another place to this standard, but we both agree that we would think twice about doing B&B with table d'hote as it is such hard work for the money earned. We will be over 60 in 7 yrs so some form of retirement beckons.......  We certainly would not recommend anyone to do both unless young & fit as it is an exceptionally hard life for the income gained - currently am counting the weeks till the last gite guests leave - mid October........then we have our 'holiday'.........

[KathyC]

[quote user="betoulle"] We will never make a profit, but so long as we approach breaking even we will continue, but as Miki says probably not for more than 7 yrs. .[/quote]

It all sounds incredibly hard work and I don't envy you.

I wonder if you could clarify what you mean by the above? I'm not in business and feel sure that your words mean something different to you than they mean to me. If I said that my work wasn't making a profit I would mean that it was costing me more to do it than it was bringing in. I don't think this can be what you mean. In other words, what do you mean by "not making a profit"?

( This is a genuine enquiry, I'm not being contentious, I really want to know.)

[Owens88]

My bet is that very few, if any, are making a 'profit' in that after paying all outgoings including mortgage*, and paying themselves a reasonable wage for the work they do, they make a true surplus. But good luck to all whatever they achieve and want.

*I now see scope for a separate cul de sac whereby people say the buildings cost very little as they have no mortgage.  I apologise in advance as I didn't mean to spawn a thread about capital employed.

[Coco]

[quote user="Owens88"]

My bet is that very few, if any, are making a 'profit' in that after paying all outgoings including mortgage*, and paying themselves a reasonable wage for the work they do, they make a true surplus. But good luck to all whatever they achieve and want.

[/quote]

"Paying themselves a reasonable wage"   You ARE having a laugh aren't you?  Preparation time for cooking dinner for 4-6 people, charging 22.50€ per head and two of us being "on duty" from 7 til 11 I think it works out at about 50 cents an hour.  No, wages would definitely be regarded as profit.  I think what most people mean by profit, is just if there's any money left once all outgoings have been paid!!!

[tenniswitch]

[quote user="St Amour"][quote user="Owens88"]

My bet is that very few, if any, are making a 'profit' in that after paying all outgoings including mortgage*, and paying themselves a reasonable wage for the work they do, they make a true surplus. But good luck to all whatever they achieve and want.

[/quote]

"Paying themselves a reasonable wage"   You ARE having a laugh aren't you?  Preparation time for cooking dinner for 4-6 people, charging 22.50€ per head and two of us being "on duty" from 7 til 11 I think it works out at about 50 cents an hour.  No, wages would definitely be regarded as profit.  I think what most people mean by profit, is just if there's any money left once all outgoings have been paid!!!

[/quote]

Just out of curiousity, if the "outgoings" don't include a living wage for yourself and you're not clearing enough after all the "outgoings" to be considered a living wage, what are you living on?  Or is this a particularly masochistic form of hobby?

[betoulle]

Basically as St Amour said there is no money left once all the outgoings have been paid, & forget the idea of a salary.........so yes I suppose it boils down to being a hobby.............we took early retirement from our stressful salaried jobs to come & do this till the age of 60 in the hope of having a better lifestyle, live in a warmer climate, not spend 4 hrs a day sitting in traffic, & actually to see each other during the working day - all of which have been achieved.  We still have a fair amount of stress & after working 12 hour days in the health service for 33 yrs my life is no different in that respect, but we live in a beautiful place & for some of the time (pre & post season) we actually do live what our friends think is a wonderful life, but during the season we are working  long hours just to pay the bills....... Anyone who thinks they can come & make money (ie take a salary) out of either gites or B&B is living in cloud cuckoo land..........like most jobs it is very hard work to cover your outgoings & anything extra is a bonus.....the bottom line is the more customers you get, the more money comes in but your expenditure goes up.......

[Cerise]

No it definitely doesn't include a living wage - but we are able to live in a very attractive house which we could not otherwise afford.  I mostly enjoy the entertaining etc, but do not see me doing this forever.  We have 2 double rooms and a family suite, offer table d'hôtes and I do most of the work as my husband has a full time job.  I do have some help in July and August or I'd probably drop dead and my husband has to come home from work shower, pin on his best smile and start laying tables and serving drinks.  We have chosen to do this - and yes perhaps it is masochistic of us.  We are definitely not rich but neither are we on the bread line.

The thing about B & B is that you cannot easily separate your own bills from the B & B.  Heating is heating whether used by us of the guests.  Our B & B pays the house and food bills, but that's about it, reason why OH has a job.  Being France that is also poorly paid, but as I say we chose to live here - we don't have a mortgage or any other debts and for the time being are content with what we do.  We did not start out wealthy or able to buy a large place with 4 or 5 gites so knowing that we own this lovely house, our cars etc and can get by financially makes it OK for us.

I agree with Miki's best possible scenario - but realistically that would require major investment in the first place - the kind of money that we did not have.  I think that doing this kind of thing is very risky, there is not a huge profit to be had unless you are able to make an initial huge investment.  I work very hard to get the amount of trade we do and seeing what has happened to quite a few places around us this year - some with literally not a single booking for July - I wonder how some are managing to continue.

My advice would be not to even contemplate either if you need to borrow money and have a young family.  Realistically gites are slightly less work than B & B, but the season is usually shorter and income a little less.  The other important thing is to check out whether there is actually any demand in the area you wish to set up.  Cheap property may mean you are in an unpopular area and however attractive your business is, it is of little use without customers.

[KathyC]

[quote user="tenniswitch"][quote user="St Amour"][quote user="Owens88"]

My bet is that very few, if any, are making a 'profit' in that after paying all outgoings including mortgage*, and paying themselves a reasonable wage for the work they do, they make a true surplus. But good luck to all whatever they achieve and want.

[/quote]

"Paying themselves a reasonable wage"   You ARE having a laugh aren't you?  Preparation time for cooking dinner for 4-6 people, charging 22.50€ per head and two of us being "on duty" from 7 til 11 I think it works out at about 50 cents an hour.  No, wages would definitely be regarded as profit.  I think what most people mean by profit, is just if there's any money left once all outgoings have been paid!!!

[/quote]

Just out of curiousity, if the "outgoings" don't include a living wage for yourself and you're not clearing enough after all the "outgoings" to be considered a living wage, what are you living on?  Or is this a particularly masochistic form of hobby?

[/quote]

Tenniswitch, you're thinking along the same lines as I was when I queried the concept of "not making a profit". Obviously everybody's financial position is different, some make more than others and some people think in terms of wages, some think of profit and some see it as additional household expenses.

 

[Coco]

Cerise is right, it is virtually impossible to separate personal living expenses from those of the B&B, ie heating, lighting, taxe d'habitation etc.; even food in peak season if you offer table d'hotes and plants for the window boxes!  If the house doesn't look attractive you won't get the business, so are the plants something that you treat yourself to or are they a necessity of the business?  It's all very blurred.  We look at it in a similar way to Betoulle - we used to sit in traffic between 4-5 hours a day, by the time we got home from work and had eaten it was about 8.30, by which time my husband fell asleep until I woke him to go to bed at 10.30-11 because we had to do it all again from 6 the next morning.  Even on my worst day here, I still know that it's better than the life we had before even though we have virtually no disposable income and I suppose that is what I meant by saying that we don't draw a salary or make a profit.  We get by and I think we have a pretty nice lifestyle, but there is absolutely no spare cash.  At the moment any unforeseen expenses have to come out of savings and that is our next hurdle.  When we earn enough from our B&B to put a bit aside and don't have to dip into the savings then I will be truly happy with the business.  But although that sounds as though it isn't worth doing, the thing to remember is that most businesses in the UK have loans when they start up, so start off in debt.  At least here, although we don't have much spare cash and we cut up our credit cards a long time ago,  we don't OWE a penny, anywhere!  And that is a very nice feeling [:D]

[Miki]

Interesting reading.

We would NOT do it for a hobby, we personally do Bed and Breakfast to

try for a GOOD living (OK, we have a cottage as well to add on) If like

Maggie, one of the partners is working and the other running the

B&B, that is a good scenario.  One can earn from the house

(still not easy), whilst one knows, that at worst the cotisations etc

are covered. We have several French friends who work exactly like that,

in fact I don't know very many French that do B&B without that sort of

set up !!

Profit ? Well the profit quite simply for anyone whose only business is

then B&B or gîte(s), is the difference between ones annual turnover

and ones total outgoings. We do OK and I supect and others no doubt do

as well, even better perhaps. If one has a private pension coming in (I

say private because if anyone is doing B&Bin any serious way

whilst actually pensioners I take my hat off and drink a  toast to

them all !), then they do have that cushion to rely on. Some of us know

of one such chap in the Creuse who has that and did alright in his

B&B as well but I would hazard a guess that many others would have

a similar set up.

As for taking a wage, that doesn't enter in to it. We all work damned

hard I'm sure but if you were to add up the hours worked against

takings (in the way mentioned earlier) then of course one would never

work for someone else for that kind of pathetic wage !! BUT, we have

over 4 months off, we take holidays, short breaks, we lunch for England, we

don't really have to scrimp any more (well not too much anyway but

believe me, we have been there, in our first venture we ploughed

everything, including ourselves in to it and had just £900 left in

theWorld, if we didn't earn that year, we were truly doomed (Mr

Mannering !)  !) but that's

not a boast of any kind whatsoever, we do think that we have both

served our time by working hard day after day here, year after year

(can you hear the violins yet ?) hands covered in poo, no don't go

there !, starting 3 businesses here, more or less from scratch 

and no holidays (well holidays of the kind that we were not having to

visit kids and family but alone somewhere in the sun type holiday !!)

at all for 10 years, so forgive me if I say, the harder you

work................well you know the rest !

Yes, you have two ways to make it pretty good living at our (meaning

all of us) game, sell a nice big house in the UK at the inflated prices

they have fetched now for a number of years (lucky so and so's, we sold

towards the bottom !) buy a great big place here for big money in a

great big tourist region and take large money OR, you can work your

socks off year and after year and if you succeed in the latter formula,

I really do offer you my most sincere congratulations because we have

seen so many people grumble and moan about their lack of financial

return but they fail to see themselves acting their life out like

one  great big holiday and not behaving as they would (or should

have !) if they were still working back in the UK.

I have even heard people say they just want enough to get by. Well, as

a person who has rarely in his life had an employer, I can say that

running any business requires dedicated hard work (and a certain amount

of vision) and if one just plans to bob along (on a graph it would show

a dead straight line) the only way is down.....to keep ahead you have

to grow, if you think different, it can only mean working for pin money, something we hope one day to be able to do !! so it's hard work but we all love it, don't we ? (sometimes then !!!)

[quote] Anyone who thinks they can come & make money (ie take a salary) out

of either gites or B&B is living in cloud cuckoo land..........like

most jobs it is very hard work to cover your outgoings & anything

extra is a bonus.....the bottom line is the more customers you get, the

more money comes in but your expenditure goes up.......[/quote]

Sorry but I know of many folks who have made excellent livings (fair

enough I have known many who didn't make it but their plans and

financial set up were against them for the most part from the start). It really does

depend on how you are set up, preferably arriving with lots of money !! We have known couples with 5 gîtes,

others with more who did (some are still doing) absolutely wonderfully.

If more money comes in through getting more clients, it will still far

outweigh ones outgoings to do so. Yes of course more "just get by than

do well but it is not really cloud cuckoo land to see many doing very well thank you but I see your point!

Lecture over, everyone back on yer 'eads !

[Derkins]

Thanks guy and gals for your comments, definately food for thought!

We don't have a mortgage and would prefer to swop our 3 bed house in the UK for something nicer with a better quality of life (ie. seeing each other during the day) therefore running gites would be something to keep our brains going and to help us pay the running costs.  So it sounds as if this would be perfect for us.  I am new to this forum and can see I will learn alot from all your experience!  Next step find an area that would suit us & the business - off to search the web again!

[Viki]

Hello!

I have read with great interest the pros and cons of running gites against B&Bs.  However, I would be very grateful if you could answer a question regarding registering as a company and paying taxes.

If you are running a gite - living in an alternative property, would you be required to register as a company ie with the chambre de commerce.  Also, what about declaring and paying taxes on the earnings/profit?  Do you have to have an accountant, or can you file your own tax returns and if so when and how?  Is there an amount that you can earn before you have to pay taxes - can you point me in the right direction to get more information???

Thank you in advance for your help

Kind regards and Happy New Year

Viki

 

[Miki]

Hi Viki,

Surprised you haven't had a reply. So here goes.

As the regulations stand now, you can have a gite and not register at the C de Com.

Yes we and I guess most others, declare and pay tax as required but also pay the CRDS. CSG social taxe on top but if registered, you will be paying this part within your payments.

You will not be required to have an accountant on micro bic tax regime and thus you can fill in your own returns. I would suggest a visit to the impots to declare your opening and get advice on what boxes you will need to fill in.

I think in 2006 one could earn up to €73,600 (chance would be a fine thing in 99% of cases !!)  and get 68% allowance before impôt is chargeable. I notice in the new regs posted to us the other day, that first year enterprises could earn slightly more than that !!

Best place to look for info is on French forums and put in a few words related to the subject in the "search" box and see what others have to say.