Free State Project Forum

New Hampshire -- The "Live Free or Die" State => NH Jobs => Businesses / Entrepreneurial Opportunities => Topic started by: scm on September 17, 2013, 06:31:37 am

Title: Thinking of buying a bed and breakfast in NH
Post by: scm on September 17, 2013, 06:31:37 am
My girlfriend and I are considering buying an established bed and breakfast in the white mountains. Looking for the whys and why nots and any helpful info, financing, etc... My biggest concerns are, the investment she will be making and where the economy is going.

Thanks in advance.
Scott
Title: Re: Thinking of buying a bed and breakfast in NH
Post by: Sam Adams on September 17, 2013, 04:44:42 pm
  Many investors use a 10% return rule to price out an investment. You should have a 10% annual return after all expenses. Lets say the business takes in $20,000 , deduct the commercial Insurance premiums, real estate tax, heating and electric, maintenance, and mostly a 1/3 vacancy rate. This fiqure should give you the value of the property times 10. So if the expenses are 10k, then the value should be $ 100,000. As far as 1929 coming, I would rather not have a mortgage, unless you could lease out it like a cheap weekly rooming house.
Title: Re: Thinking of buying a bed and breakfast in NH
Post by: d.j.smith on September 17, 2013, 11:42:15 pm
scm:

(and this is totally off the cuff)

You only live once. The two questions you and your girlfriend should be asking are (1) Is this something we really want to do? Do we know what the downsides of such a life will be, and will the upsides more than compensate us? (2) Is the one we're thinking of buying in a good location? How has the current business fared in the past in regard to number of customers?