You should also know that not everyone is cut out to operate this type of business successfully. In fact, recent statistics indicate that some bed and breakfast owners suffer from burnout within five to seven years. In addition, if you do change your mind and decide you aren’t cut out for this position, a bed and breakfast can be difficult to sell, based on the number currently advertised online. Whether you will be able to make enough money running a bed and breakfast to cover your expenses and actually make a profit also depends on many factors, so it is important to proceed with your eyes open if you are considering jumping into such a venture.
What It Costs To Operate A Bed And Breakfast
It’s possible that you already own a home that would be the perfect spot in which to run a bed and breakfast, but if not, you will need to invest in such a property to house your new business. If the latter is the case, you will face all of the standard expenses that come with purchasing a new home or starting up a business.
To get 
an idea of what type of costs are involved, let’s assume that you are purchasing a home that costs $750,000 and that you will be taking out a mortgage or business loan at 7 percent interest. You will need to put down 20 percent—or $150,000—so you will be financing the balance of $600,000. In addition to the standard mortgage closing costs, you will need to set aside money for property taxes. For the sake of calculations, let’s assume they are 1 percent of the property value, and let’s also estimate another $10,000 annually for umbrella insurance.
Cost: $5,475 per month
- $150,000 down PLUS
- Mortgage: $4,000
- Taxes: $625
- Insurance: $850
Other Start-Up Expenses:
If the bed and breakfast is small enough (let’s say five bedrooms for the sake of calculating daily work and expenses), you should be able to manage the cooking and cleaning on your own, at least at the onset, to help minimize your other expenses. But even doing much of the work yourself, you will need to cover a variety of other start-up costs to furnish the bed and breakfast with all of the necessities. For instance, furnishings and renovation costs (including electrical, plumbing, painting and landscaping) will cost $25,000 or more to get things up and running, assuming you’re starting with a house in fantastic shape to begin with. You should also expect to spend at least $25,000 for supplies like mattresses, sheets, blankets, smoke detectors, road signs, promotion/advertising, new kitchen equipment, etc.
So a total of at least $200,000 cash investment up-front and $5,500/month for a $750K Five BR B&B.