At our recent Innkeeper’s Resource Seminar For Aspiring Innkeepers at the Thomas Shepherd Inn we had what would seem to be a simple question with a not so simple answer. Our attendee said, "When I’m on the Internet looking for inns for sale, it seems I see a list that gets longer every day, and there are lots of properties that have been there a long time. What’s going on?"
What’s going on? Quite a lot. First, it’s not unusual for a quality inn in a good location that is well priced to take a long time to sell. These are very unique properties that take a special person to be a fit. But, aside from that, there are many B&B’s for sale that are not businesses at all, but rather a beautiful home where a B&B is operated and which, therefore, can’t support a mortgage. In a world where many people are seeking an alternative lifestyle but need to make a living, most of these properties will be knocked out right away. Many should really be offered (and purchased) as residential real estate.
The second and, in our opinion, most important factor is that the vast majority of inns for sale are grossly overpriced. It seems that the rationale for pricing is nebulous or misinformed at best, fanciful or misleading at worst. There are methods for pricing B&B’s and inns, but many people don’t know what they are or misuse them. Some people get caught in the trap of estimating a price or value based on what other people are asking. If they aren’t selling, maybe there’s a better place to look! Sale prices are what count, and that information is harder to find.
Lastly, the current credit crisis in the markets is making it more difficult for people to get loans to buy anything, much less a B&B that most lenders don’t understand to begin with. However, good borrowers buying quality properties that make financial sense and that, importantly, are well and reasonably priced, will always be able to get a loan. We work with some of the best lenders in the business and have seen them "make it happen." So, don’t despair, whether you’re buying or selling, just get good advice.