Is a VIABLE Inn or a LIFESTYLE Inn Best for you?
As an aspiring innkeeper, one of the more difficult decisions to be made is viability vs. lifestyle. A viable inn, usually an inn with 8 or 9 guest rooms or more, is one that has enough cash flow to pay not only the operating expenses, but the debt service (mortgage) as well. A lifestyle inn is usually a smaller inn, perhaps even very busy and popular, but does not have enough cash flow to pay the mortgage.
One Choice is Not BETTER than the other! They BOTH can offer the Rewards of Inn Ownership!
The BIG QUESTION becomes “Do You Need to Make Money?”
If the answer is YES, then viability of an inn becomes a priority for your search and part of your inn profile.
If the answer is NO, then a lifestyle inn may be just the ticket…the joys of inn ownership at a smaller inn.
Financial considerations for a lifestyle inn include the size of the down payment and whether there is outside resources to help pay the bills. A smaller inn typically does not require much staffing which helps keep expenses down, and, if someone is working outside of the inn, the need to pay for health insurance and other corporate benefits may not pose a expense burden. And the rewards can be very satisfying! The inn may even make enough to pay the usual household bills (utilities, phone, food, insurance, etc.) and ease the pain of the mortgage.
A good example of a lifestyle inn is The Limestone Inn, currently for sale at $595,000.
Located in State College, PA., only 4 miles from Penn State, the inn enjoys the privacy of being out in the country, but close enough to corporate businesses and the campus to do a strong business. But the inn only has 5 rooms which limits its ability to make enough to pay the full mortgage. But with over $50,000 of revenue for each of the last 3 years, the inn can easily pay its bills with a good size chunk of cash flow left over to take a dent out of the mortgage payment…an ideal lifestyle inn in a great marketing area.
An example of an affordable viable inn is Grape Arbor B & B located in North East, PA. This inn, currently for sale for only $845,000, with 8 rooms, all with private baths, with its 33% occupancy, is large enough to be able to pay the bills AND the mortgage. It is ideally located in the Chautauqua-Lake Erie Wine Trail region within easy reach of the Buffalo, Cleveland, and Pittsburgh marketing areas. Compared with The Limestone Inn, the additional 3 rooms helps bring in the extra revenue to be viable.
Both of these inns offer the rewarding experience of inn ownership. Both are not necessarily huge inns, and may be managed by a single person, with perhaps some part-time staff help, or by a couple. Size of the inn is typically the primary determining factor when considering viability vs. a lifestyle inn, and, when coupled with the marketing location and potential to attract guests to the area attractions, either inn can offer the enjoyable experience of owning your own B & B. Scott