For a lot of people, the idea of abandoning the rat race to open a little bed and breakfast in a picturesque part of the world sounds like an absolute dream come true.<\/p>\n
What a great way to meet new and interesting people while being paid to keep a beautiful home in a beautiful area.<\/p>\n
The realities of running a guesthouse, however, can be a little more complicated than people imagine. If you\u2019re trying to figure out if it\u2019s the life for you, here are just a few of the things you need to consider.<\/p>\n
Finding the right property<\/strong><\/p>\n \u201cThere are two main ways to get into the B&B or guesthouse business,\u201d said Bill Rawson, chairman of the Rawson Property Group.<\/p>\n \u201cYou can buy an existing guesthouse or you can start from scratch in an appropriate property. Either way, location is vitally important \u2013 if you\u2019re not in an area that appeals to holiday-makers or business people, you\u2019re going to struggle to attract regular guests.\u201d<\/p>\n Buying an existing guesthouse or B&B<\/strong><\/p>\n When buying an existing establishment, Rawson recommends double-checking the zoning permissions to make sure the B&B or guesthouse is legal, and getting a clear idea of the rate of occupation and expense to turnover ratio from the existing owners.<\/p>\n \u201cGuesthouses are usually significantly more expensive to buy than ordinary residential properties, for obvious reasons,\u201d said Rawson, \u201cespecially if they are well-known or popular.<\/p>\n “You\u2019ll need to weigh the purchase price against potential future earnings as well as the possibility of capital appreciation on the property itself, however don’t ignore the existing market value of the property if used as a rental for a family.”<\/p>\n Converting a residential property into a guesthouse or B&B<\/strong><\/p>\n It may seem more affordable to convert a residential property into a B&B or guesthouse, but Rawson warns that this option isn\u2019t always as cost-effective as it might seem.<\/p>\n \u201cRenovations are not only expensive, but time-consuming and stressful,\u201d he says, \u201cand it may take months to get the property up to scratch, not only for comfort, but to conform to all the regulations laid out by the government as well.<\/p>\n It\u2019s especially important to think about things that might impact your neighbours, like parking,\u201d he added, \u201cor they\u2019ll be lodging complaints that could put a pin in your guesthouse plans indefinitely.\u201d<\/p>\n It\u2019s also vital to ensure you get the correct zoning permission when setting up a B&B or guesthouse from scratch, and Rawson recommends familiarising yourself intimately with the requirements listed in the local Zoning Scheme.<\/p>\n \u201cThe rules can differ from suburb to suburb, let alone municipality to municipality,\u201d he said, \u201cso make sure to check the specifics for your area, and don\u2019t take anything for granted.\u201d<\/p>\n Cash flow and finances<\/strong><\/p>\n The hospitality industry is notoriously seasonal, and unless you are lucky enough to attract regular business clientele, you may well need to weather periods of few to no guests and, therefore, no income. Because of this, it\u2019s advisable to plan your finances very carefully and ensure sufficient savings to carry you through the occasional dry spell.<\/p>\n \u201cTry not to overextend yourself, especially at the beginning,\u201d says Rawson. \u201cHigh monthly repayments on a large bond can become unmanageable during a particularly bad patch, and you don\u2019t want to find yourself losing your property because of a few months of low occupation.<\/p>\n Rates and taxes are also more expensive for guesthouses than ordinary residential-zoned properties,\u201d he said, \u201cbut this shouldn\u2019t have a dramatic impact on your profit margins.\u201d Dry spells aside, successful guesthouses can be very profitable endeavours, with relatively low overheads that scale according to occupancy.<\/p>\n In terms of gross income, a guesthouse with four double rooms, charging R600pps could generate over R86,000 per month at an occupancy rate of 60%.<\/p>\n Adapting to the lifestyle<\/strong><\/p>\n Life as a guesthouse or B&B manager can be extremely rewarding, but it\u2019s also rather hard work. You\u2019ll face long days \u2013 up early and working until late \u2013 and all manner of complications arising from day-to-day maintenance and operations, as well as fussy guests. \u201cIf you\u2019re not a people person, hospitality isn\u2019t for you,\u201d said Rawson.<\/p>\n \u201cA huge amount of being a successful guesthouse owner involves being able to please and placate guests \u2013 even when they are being unreasonable or rude.\u201d<\/p>\n The upside of the B&B lifestyle is that you\u2019ll likely still have plenty of time to yourself \u2013 usually in the middle of the day when your guests are out enjoying the attractions of the area.<\/p>\n Remember that you\u2019ll need to ensure there is always someone available at the guesthouse or B&B, so your leisure time might still need to be spent on the property, Rawson said.<\/p>\n One must also realize that you’ll now be competing with Airbnb which is very competitive and well positioned due to the shared cost of online marketing. Today most businesses rely upon online marketing to be successful, so it’s not just good enough to have an average website, you’ll also need to market through as many other platforms such as facebook and twitter.<\/p>\n Today is all about consumer centric marketing, the property group said.<\/p>\n While the B&B life may not be as easy, romantic or idyllic as people imagine, it can, nonetheless, be a profitable and satisfying alternative to a nine-to-five desk job.<\/p>\n If you have the energy, dedication, and passion for people the hospitality industry requires, and the ability to plan and budget for the ebbs and flows of the tourism industry, a guesthouse may well be the ideal job for you, Rawson said.<\/p>\n
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