What is a Bed and Breakfast Property?

A traditional Bed and Breakfast or Guest house establishment consists of privately owned premises that offer value for money, accommodation inclusive of breakfast, quaintness and hospitality, and opportunities for the guest to exchange ideas with the host and be the recipient of sound, local, sightseeing advice.

Most B&Bs and Guest houses tend to be large houses, where the business proprietor and family live on the premises, usually having more interaction with paying customers than in other types of guest accommodation. Bed and breakfasts usually offer fewer facilities than hotels; guests do not expect a bar or 24-hour room service, just a bed for the night and breakfast the following morning.

B&B Mortgages/ Guest house mortgages

Banks and other commercial lenders offer B&B mortgages. Often with the help of a Bed and breakfast mortgage broker.  In most cases they will advance up to 75 percent of the value of the property for finance, if they are satisfied with the applicant’s business plan and income forecasts. Fixed rate  mortgages are available.

Most B&Bs or Guest houses are bought and run by couples. A prospective lender will want to know about the borrowers’ current financial situation, previous experience, current employment and whether either partner intends to continue in their current job (on a full time or part time basis). If the property is currently being run as a B&B/ Guest house, the commercial mortgage lender or Bed and breakfast mortgage broker will also want to inspect recent accounts to ascertain the current trading position and potential future prospects of the business.

As with a residential mortgage, when applying for a Bed and breakfast mortgage, the  lender will also require a report on the physical condition of the property in order to be assured that it is structurally sound. Projected costs for ongoing maintenance and refurbishment should be included in the applicant’s business plan because wear and tear is likely to be a bigger issue for a B&B or Guest houses than it would be for a private residence. A Bed and breakfast mortgage broker can also provide loans and finance for refurbishment as well as offering business mortgage advice.

Summary

Commercial and business mortgages are readily available for B&Bs and guest houses provided that applicants can meet certain criteria; using the services of a B&B mortgage broker will help. They will provide Bed and breakfast mortgage advice which is impartial.
Lenders can sometimes expect a  business plan and income forecasts from applicants for Bed and breakfast mortgages or Guest House  mortgages whether going through a commercial mortgage broker, or directly.

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