Are most bed and breakfasts actually profitable...?

Question

or do most people start them to save money on taxes? If I ever owned a b&b what is a realistic expectation for profit? Are rooms booked most nights?

Answer 1

In November 2005, PAII released the 2004 Industry Study of Operations and Finance. This survey of 285 properties showed occupancy rates averaged 41.4% in 2004 up from 39.9% in 2003. The average daily rate (ADR) paid by B&B guests increased from $142.73 to $143.90 over the same period, driving revenue per available room (RevPar) to $59.57, a growth of 4.6%. This drove industry revenue to an estimated $3.2 billion in 2004. The study also noted that “while new inns continued to open in 2004, the increase was offset by the reversion of some properties to single family homes, particularly in resort areas where real estate prices have escalated.”

Answer 2

Thats honestly a good question..
Ive thought of that myself b/c I saw one recently in a neighboring city. Im just wondering if its similar to the B&B in Forrest Gump.
I would think that with times changing, more sneaky criminal minds out there, it wouldnt be that profitable... I hope someone changes my mind on this..
but a really good question though ;)

Answer 3

I think you answered the question with the thought on taxes.
IFF you really know the taxe rules extremely well, and the emphasis is on EXTREMELY, then you "make" money even if you loose money. The entire tax structure is designed, by millionaires, for millionaires. Look at the people who are in power at ANY level of government - they all have corporate links, with legal and corporate backgrounds, all have stockmarket investments and are heavily involved in businesses. They all WRITE OFF expenses, and write off business lunches, and business trips and business phones and business cars and business computers and business furniture etc. etc. etc. and they are in position of POWER to make certain that these write-offs and corporate "PERKS" work in THEIR FAVOUR, which they certainly do. For example, they LEASE ( not buy) a " corporate or Business car" for 3 years. Typically, every year for 3 years the taxes allow them to write off 1/3 of the cost of a business car - net result - they get a car FREE. Same for a business computer - every year they write off 1/3 of the cost of the 3 year lease of their computer = = = = FREE. At the end of 3 yers, they just get a brand new one, shiny and new, and guaranteed for 3 years.... sounds great.
In setting up a B&B you HAVE TO know all the laws and details of the taxes in your area, and of the Federal area, and deliberately set up the BB to exactly match the limits and conditions of the laws TO THE LETTER. If you just set up a B B and THEN, think " I am going to write stuff off, when its tax time" you are already screwed. You absolutely MUST know in advance, when to lease or buy what, by what date, in which manner, to what limit, and how you will fill out the tax forms, before you do anything...
You have to know more than the " typical" tax people, since you are entering the millionaire club, and the exact interpretations and details of rather vague wording start to become very important.
Iff you do your homework, and set up everyting correctly, you can make money every year by writing half of everything off - a car, a computer, an office, house repairs, improvements, heating, plumbing, business lunches, business trips, business related educational costs, etc. etc. - just like the millionaires - after all - this is how they became millionaires in the first place ! You can get into off shore bank accounts, stock market games, and all sorts of aspects of the corporate world - but beware - this game is designed for the self serving group at the top of the food chain, and if you make any mistakes you will pay severely. They would rather keep this profitable aspect of money making to themselves... Ordinary people are not supposed to "play"...
If you know anyone who works with taxes, get all the help you can IN ADVANCE. If you don't know anyone, then you will have to do research into tax laws and business tax laws, and move cautiously....

Answer 4

its all about location......... if you're in a good location then it will definitely be profitable. Advertisement is another deal as well. If you have both of these then you will definitely be making alot of money