The great thing about financing a Bed and breakfast is that it does not have to have a large start up cost compared to many other businesses. The biggest portion of the investment is the rediential real estate. The cost of the real estate depends on where and what you purchase. Getting a conventional residential mortgage for the property becomes the starting point of an overall business plan. All the information provided on this website assumes that your Bed and Breakfast will be in the Niagara Region or at least the property will be zoned residential.
1) Bed and Breakfasts in Canada are still a nouvelle idea. Banks do not know how to handle them. Although Bed and breakfasts are normally zoned residential, you will be running it as a home based business therefore banks will want to use commercial critera and rates for the mortgage. Commercial rates are much higher than residential rates. That should not be the case and I can help this from happening (one of those services I help with)
2) With all new businesses, banks will not consider the revenue until you have a proven track record. After 3 years and you are ready to renew the banks will use the revenues from the Bed and Breakfast.
3) You can not use the revenue of the past owners when discussing mortgages or again the banks will start to use commercial rates.
Mortgage and Land transfer calculator
So what do you do...
Contact me and we can discuss your options.
More Pages:
