Why do inns often take so long to sell?
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Morticia
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Location. Not priced correctly. Not run properly. Not maintained.
Several places we looked at were still for sale five years later. When we looked they were charging $90/night. They were still charging the same five years later. No room for growth.
Friends had their place for sale for about six years. They completely renovated the building, did a remarkable job with period decoration, cooked fabulous breakfasts, but were only open six months out of the year. No one knew how to ‘sell’ a gorgeous property with million dollar views that was only open in the summer season. So, they waited around until they got someone who made it a challenge to themselves to sell it. And it sold in months.
Another friend also took six years and lost a ton of money on the sale. The person who took over immediately worked with a marketer and doubled the occupancy in the first year. Just changing the homepage on the website was probably worth $30k the first year!
Generally, it’s a good idea to plan for two years to sell. Unless you’ve gotten tons of awards from all sorts of people, it does take a while.
Several places we looked at were still for sale five years later. When we looked they were charging $90/night. They were still charging the same five years later. No room for growth.
Friends had their place for sale for about six years. They completely renovated the building, did a remarkable job with period decoration, cooked fabulous breakfasts, but were only open six months out of the year. No one knew how to ‘sell’ a gorgeous property with million dollar views that was only open in the summer season. So, they waited around until they got someone who made it a challenge to themselves to sell it. And it sold in months.
Another friend also took six years and lost a ton of money on the sale. The person who took over immediately worked with a marketer and doubled the occupancy in the first year. Just changing the homepage on the website was probably worth $30k the first year!
Generally, it’s a good idea to plan for two years to sell. Unless you’ve gotten tons of awards from all sorts of people, it does take a while.
TheBeachHouse
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The ones here that don’t sell are in need of work, or don’t have a proper owners quarters. People used to accept sleeping in the back room or basement as part of owning a business. But now, people want a proper home with a guest room and outdoor space.
Most inns in this area sell better as a single family home or condo conversion. It’s sad.
When we bought, eight years ago, there were four inns on our road. Now there are three refurbished, high priced mansions and one inn.
Most inns in this area sell better as a single family home or condo conversion. It’s sad.
When we bought, eight years ago, there were four inns on our road. Now there are three refurbished, high priced mansions and one inn.
It's all in the marketing, positioning and the timing. We could not believe our place took 4-5 years to sell but later heard the owners had an offer 4 years prior to us at a price not much different than what we paid, rejected it and didnt even counter... also the financials significantly underrepresented the potential... Year 4 for us in 2021 we will nearly double their final year revenue.... and we have made the place totally turn key with new furnace, hw heater, recoated roof, many remodeled rooms... we saw the potential and will hopefully realize the reward when we go to sell, which could be within the next 12 months....
Morticia
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Someone new could easily double our revenue. We’re older now and want our time off more than the money. However, that attitude doesn’t sell an inn.
JimBoone
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My view, running a B and B, Inn, or Motel can be a great way of life, but compared to some other businesses there is a high investment in the physical property in relation to the income or cash flow. Seems to me that eliminates a lot of potential buyers who don't have a lot of money up front as payments could exceed the cash flow or at least take the fun out of the business.
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I agree with JimBoone. We started out with no debt - used the cash from the sale of the Illinois house to pay off the refinance that had allowed us to pay cash for this house. Having NO FEBT allowed us to get started back in the day of Directories, just prior to the Internet bursting on the scene. I had a website from the beginning - before I had a computer! IF I had an e-mail, the hosting company would call me until I got the computer. We would never have been able to make mortgage payments on what we took in the first year.
JimBoone
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Unlike Gillum we didn't start with no debt, but our place was somewhat of a project (bargain priced) and our financing creative. About 40% was covered by a loan against some property we owned (rents made those payments), 20%, by selling a piece of rental property in the first couple of years (eliminated second mortgage), 40% financed by the original motel owner and a further advantage of one annual payment due at the end of the year rather than having to pay during the slow times.
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BUT, lest that scare anyone off - you must remember, I am NOT in a tourist mecca. I am off the path. We have rarely ever found ourselves having a revolving door. The one exception to that I can remember was in 2007 - while Himself was in the hospital & then rehab with his 6-way by-pass., the old axiom of it never rains but pours.
