First you have to set up the objectives of your B&B

After that, you will need to look at the selection criteria for your B&B. We will discuss that in the second part of this article. But first, let’s look at the objectives of your B&B.

A real project, not a choice by default

First of all, it is necessary to make a real introspection; to discover the “why” of your choice. Is it due to too much professional stress? Are you fed up with a too cold/wet climate? The fear of never seeing an old dream come true?
In the end, it is not necessarily answering that matters but rather asking yourself the question. The most important thing is that it is not a default choice, but that it results from a real positive dynamic.

Be in sync with your true self

It is fundamental to define one’s “spiritual” objectives because the “physical” configuration of the real estate will have to correspond to these objectives.

An individual introspection, then a pooling

Very often, the choice is made between the 2 partners. It may happen that the desires and expectations of the two partners do not always coincide. A dialogue must happen in the project, in order to understand and take into account the expectations of each other.

These mutual goals will be translated into “weighted criteria”. The challenge is to match these personal criteria in a common project. How do we achieve this?

Let’s check the specific case of Maria & John

Along these articles we will follow a couple in their B&B adventure. Maria, 51, is Finnish. John, 53, is Irish. They have lived in Holland for 30 years and have two children aged 26 and 24 who are both sentimentally in a relationship and are financially independent.
Maria and John want to change their life and open a guest house in Spain.

Maria wants to leave her country’s grey skies. She is a painter and sculptor, and also an excellent diver. When leaving to live in Spain, she would like not only to personally enjoy the sea, but also to organize one or another snorkeling activity with her future guests. She wants to buy a property with a rustic character with beautiful stones, large rooms and rather luxurious and beautiful gardens. She also needs space to store all her diving equipment, in addition to the Jet Ski she just bought. She also loves to cook and is looking forward to preparing delicious homemade breakfasts in a spacious and functional kitchen.

John worked in the financial sector; he is looking for a “cooler” life. He would absolutely like to improve his golf skills and realize that, for that perspective, Spain is a fantastic country. The offer of greens is indeed impressive, whether in terms of quality or quantity. He also wants to welcome travellers to his guesthouse and wants to dedicate time rather than needing to maintain a large property. Comfortable with numbers, he is concerned about the costs of the future B&B. For example, he would like to have renewable energy sources in order to minimize maintenance costs. He assumes that the building must be new to provide satisfactory energy performances.

In terms of timing, Maria & John would like to buy this property within 6 months. They plan to live in Spain and run their B&B for the next 10/15 years. They would then return to their country of origin and leave the property to their children.

How to reconcile these two visions?

How to select the perfect Bed and Breakfast in Spain?

Determine your budget

The heart of the matter, again and again. Every dream comes at a cost, and respect of the budget will serve as a major marker separating the possible from the impossible. This is the first step. You can do it yourself or call your banker, your personal advisor or your accountant.

Determine your total assets value

First of all, it is necessary to estimate the relative value of Maria and John’s global assets. This inventory will include:

• Real estate & invested cash (funds, stocks,…)
• Savings books, pension savings
• Life Insurance and group insurance
• Physical assets (paintings, cars, …)
• Deductions: outstanding balance and other debts

Concretely, let’s have a look at the assets of Maria and John

The couple’s global net assets amount to an estimated 800,000 €.

If we take into account that, ideally, the real estate assets can not exceed 90% of the global belongings, the limit for Maria & John is therefore fixed at 720,000 €. By deducting the existing real estate (300,000 €), we arrive at a total of 420,000 €. Taking into account global Spanish acquisition costs of 15% (registration, notary, small development costs), we come to 365,217 €. This amount represents the maximum amount (excluding fees) available.
This is the amount that Maria & John will have to take into account when they check the real estate offers.

The overall amount (420,000 €) could be self-financed mainly from own funds (the available cash amounts to 380,000 €). It could also be linked to a mortgage credit, classic or bullet type. This could be a very tax-efficient process. One thing is certain. The more important the self-financing part is, the more attractive client for a bank you will become, and therefore the better your borrowing conditions will be.

Your borrowing capacity will also depend on your income, of course. As explained in our first theme, you should ideally benefit from other financial resources, apart from those generated by the B&B. Count on the fact that one-third of your net income can be used to pay off the credit.

For more on that, read our paper: Your definitive guide to your Spanish Mortgage: How to apply? How to get the best rates? It was written as a help guide for financing your second home but could be useful to check financing conditions for your B&B in Spain.

Now that the budget is set, Maria and John can move forward.

How to reconcile everyone’s expectations?

Our tip: Ranking all the criteria for each potential property in a worksheet

The idea is simple: to create a weighted matrix containing the physical characteristics (pragmatic, rational) of the house, we will call them the Criteria and by giving each of them importance (personal, irrational).

The confrontation of intangible dimensions with “mathematical” values will grant a rating to each estate.

Listing them in a table will help in comparing the different properties visited by giving each of them a global score.

The CRITERIA are rational and apart from personal feelings. They are formed beforehand by Maria and John in the form of an exhaustive list of each of their personal criteria.

The other dimensions give a score to these criteria. They are irrational, namely:

• The WEIGHTS – ranging from 1 to 5 (best) – indicate the importance of the criteria for the person. They are specified on the worksheet before visiting the property.
• The RATINGS – ranging from 1 to 10 (best) – will be completed after the visit to the property and indicate the level achieved by the property for this criteria.

By multiplying WEIGHTS and RATINGS, each CRITERIA will get a personal score. By adding all these values, we will apply an overall score to the property.

To sum up, here is the step-by-step guide to your ideal B and B:

1. List the CRITERIA of the ideal property
2. Give a WEIGHT for each criterion
3. Visit the potential properties and give them RATINGS
4. Compare the ratings between the partners if you have a partner and between the different properties

This process will help you to rationalise the process and remove some of the emotions involved. This is important as you should consider your project as a future business.

Let’s analyse the first Bed and Breakfast on the list of Maria and John

The first potential Bed and Breakfast located by Maria and John is in Calpe, Costa Blanca, Valencian Community. They have visited this beautiful little house on a plot of 3,200 square feet acres in an urbanized subdivision. Recently built and close to the beach, it has 6 bedrooms in 2 separate aisles: 2 on one side (private area for Maria & John) and 4 on the other side. These last ones will be used for the B&B guests.
Besides, there is a garage, a swimming pool and solar panels.
The price is OK: 295,000€.

The selection criteria matrix of this bed and breakfast in Calpe.

We notice that John gave a better rating for this house in Calpe than Maria, despite the proximity of the sea, dear to Maria.
This result is interesting. It will be a real starting point when Maria and John will compare different estates with similar matrices. Let us point out that the more potential estates and visits, the more this analysis, and ultimately the choice of property, will be fruitful.
We will come back in a future article on the actual search for the estate.

Coming soon: Theme 4: Looking for the right estate & Negotiation skills

Two things to keep in mind

Administrative and legal checks will also be essential. A property may look attractive at first glance, but is it really so? A check of the legal papers, regulations, licenses granted will be absolutely essential. We come back to this later on.

Conclusion

We have:

• verified that Maria & John are meant to run a B&B: What are their true objective in opening a bed and breakfast?
• defined their objectives, budget and property selection criteria

Our second theme is now completed. We will continue our analysis in a future article by finding out what the current Spanish B&B market looks like in Spain. This will help Maria and John determine in which Spanish region they want to go.

See you very soon.

Patrick

We want to contribute to the success of your B&B in Spain

We invite you to discover this world thanks to our external partner, Patrick. We want to contribute to the success of your project by sharing tips and informative data.

Patrick has created a detailed series of articles related to his extensive experience in the B&B business in Spain. It is a chronological guide starting with the set-up of your B&B project and advising you step by step in order to better manage this professional transition: How to create selection criteria? Where to locate? Administrative work? Marketing?…

The topics are divided into a series of 8 themes and will be published on a regular basis. At the end, you will have all the keys to open the door of your dreams.

Need assistance for your B&B? Ask for more information to Patrick. Our B&B Specialist in Spain

Introduction: How to set up a Bed & Breakfast…and manage it?

Theme 1: Is the life of a B&B Manager for you?

Theme 2: How to select the perfect bed and breakfast in Spain?

Theme 3: The Spanish B&B market

Theme 4: The Top Spanish regions for setting up your B&B

Theme 5: The financial plan for your B&B in Spain

Patrick

B&B adviser, Partner of HowtobuyinSpain

Patrick created and managed his own B&B in Spain for 8 years. He knows the ins and the outs of that business.

About Patrick and his team, our B&B adviser

Patrick has a degree in Applied Economics and a master’s in International Politics. With a financial background, he lived for 8 years in Spain, setting up from scratch and managing a charming B&B. The B&B is still running today.

Patrick advises you on all the major decisions related to the business life of a B&B: B&B Business setting up, B&B estate selection criteria, administrative & legal procedures, Communication strategy and Day to day business.

His expertise covers all the Spanish coastal regions.

Languages: Dutch, French, English, Spanish & Catalan

Looking for a property hunter, a lawyer, an architect,… a local expert in Spain? Ask us directly!

Check the full team of HTBIS here

The post How to select the perfect house to start your Bed and Breakfast in Spain? appeared first on How to buy in Spain.

Is the B&B Manager life in Spain made for you?

At the beginning of the project, it is necessary to be able to put yourself in a position where you can see if the life of a B&B manager is made for you. It is clear that your situation, environment and general context will be specific to you. Nevertheless, we can identify some key elements that are common to all B&Bs.
We will talk about prerequisites with which you must be in harmony. Let’s see this in more detail.

The 3 “musts” for the B&B manager life:

The first important aspect is to realize that managing a guest house is a real job. It is not a holiday or cushy work. Even by limiting the services offered and the size of the property to maintain, this is a real job, with its positive aspects and less rosy or glamorous sides. This must be clear for anyone who wants to embark on this great adventure.

Only by practising the business of managing B&B, you will judge appropriately the profession. Nevertheless, 3 prerequisites are absolutely essential.

1. The 1st objective must not be financial!

It is obvious that catering is not the sector where the margins are the most important. It must be very clear to you.

The margins are usually quite low in fact.

It is only by generating a lot of volumes that you will get a substantial income. Having said this, it will be necessary to agree on the workload and maybe consider outsourcing some activities.
The questions you need to answer are the following:

• Will you share the workload with external partners?
• Will you do everything on your own?
• How about homemade dishes for the meals?
• Who will clean the rooms?
• Will you wash the sheets yourself…and iron them?
• Will you take care of the whole property (grass, trees, plants,…)?

Any activity that you won’t do yourself, will mean, less work on your shoulder,… but higher fixed and variable costs to run your business.

For any external partner, ask yourself: at what price? Investigating this topic leads you to a fundamental choice.

More time, less money… or reverse?

Would you be ready to earn a little less in order to improve your life quality? What’s the most important for you…and your partner? Do you both agree on this?
Having said that, even if the goal is not financial, you will need to set up a financial plan.

Financial Plan

The Financial dimension which guides you must be twofold:
* buying a property at a fair price and relying on a recurrent property gain throughout the years

* Make sure that during the running time of the B&B, the revenues cover all your costs: fixed costs (mortgage repayment, if applicable), but also variable costs, such as heating, electricity, food & travel expenses

Important to have other income sources

Ideally, incomes from the B&B should be considered as additional revenue. It is important to have other sources of income. The ability to work part-time elsewhere, and/or rental yields from other property rented would be a real source of comfort.

Our concrete advice: “a co-management by two persons having distinctive time and financial dedications”.

Read more on the financial planning of your B&B in Spain in our detailed article.

This is the winning formula

• one of the two people manages the B&B on a daily basis by dedicating himself/herself entirely to it,
• the other one dedicates time to it in a variable and adaptive way according to the activity. He/She will pursue a professional activity of its own, generating income in a secure and recurring manner.

This methodology is effective, especially in the context of seasonal work, as is the case of a B&B. Unless you go to the Canary Islands and enjoy a constant climate throughout the 12 months of the year, you will have to adapt to the climate, the seasons and therefore the occupancy rate. Check our monthly weather statistics on any Spanish City.

This management type will make it possible to have two visions and (distinct but complementary) approaches while minimizing the financial risks. Following this philosophy will allow you to manage your B&B without having a Damocles financial sword over your head.

This will improve the service quality you offer to your guests. It will be one of the major pillars of B&B’s customer loyalty and a prerequisite for capturing prospects.

2. You love social contact!

Social and human meetings are key to the activity of a B&B manager. This is where the real wealth is. Human contact, therefore, is a dimension that you will need to master.

Put yourself in the place of your future hosts. Choosing an un-renowned B&B may be risky. Still, they decide to come and spend the holidays at your place rather than in a beautiful hotel. Why? This has probably to do with a fundamental aspect: social contact and the expectation of “something different”.

This means that one way or another, they will want to spend time with you. Many will be curious to know the “why&how” of your project. Smiling, you will repeat for the umpteenth time the same story. Your hosts will be eager to find out about the good place hardly visible on a map or the fantastic little restaurant still not listed on tourist guides.
It will be up to you to give them this information. It will convince them that they made the right choice of holiday.
In a nutshell, you will face continued high demand. It will therefore be important that, when you want to recover your family intimacy, you can will able do so. This a key element when it comes to choosing the appropriate B&B configuration.

Theme 2: How to select the perfect bed and breakfast in Spain?

Keep a private area?

Some guest houses have physical separations between private and public areas. “Friendships” with guests may appear. The temptation will sometimes be strong to open the doors of its private side.

Our advice: keep a private part, exclusive for you, when your relatives will visit.

What is certain is that, by managing a B&B, you will travel while staying at home. People from all over the world will come to visit you. You will spread your contact network with great people of different cultures and environments. It’s just fantastic!

3. Understanding the life of a B&B Manager: the Time Test

The guesthouse or “casa rural” means the delivery of 2 main services offered by the manager: the bed (with bathroom, private or not) and the breakfast. This is contrary to the concept of a rented vocational house where the keys of a building are given on the arrival date, and taken back on the departure date, with no service provided in between. In this case, the customers are completely independent.

Read more: Theme 3: The existing B&B offer in Spain

The services offered in a B&B, therefore, include regular visits to the rooms but also and especially the organization of breakfasts.

Practical example: the breakfast “work” with its time implications

A breakfast (worthy of the name) must be ready at 8 am. It will necessarily involve a preparation from 7 am (food + room) and finish around noon. Taking into consideration the chatting, the bringing of additional food, and then the cleaning& storing, as well as the next day’s preparations of homemade dishes, count a half-day for the “Breakfast” task.

Evening meal?

Now, the guests are usually also very fond of evening meals. You may want to give your personal touch applied to fresh and local products. This is a great idea your guests will appreciate a lot but you need to realize that, as a consequence, your schedules will “undergo” additional extensions.

How long is the high season?

Furthermore, you may have guests the next day who required an early breakfast. In the case of evening meals and early risers the next day you will have 5 hours of sleep at most. This may happen 7 days a week, and last during the whole high season. Whatever the Spanish region, a high season means at least 2 months. You will lose track of time. Is it Sunday or Tuesday?…
While you believe you can count on quiet moments, you will still be annoyed sometimes. It will also happen during your meal, or while you sleep. No great deal but you need to be aware of all this. Unavoidable events will mark your route as B&B manager…as it is in the case of any “normal” job.

Generally speaking, the more your time and dedication will be important, the more it will be valued, and respected by your customers. There will be a form of “give & take”, where your hosts, aware of the work you do, will also help you with minor tasks. Here is a practical example.

A customer will always want to clean up his/her table if the meal meets have met expectations. A form of “B & B culture” can appear where customers copy others. After everyone is done eating in the morning, you will arrive at the breakfast place, ready to take away food and insert dirty plates in the dishwasher. Suddenly you realize that everything is already in the dishwasher; part of the job was done by your guests! You will see that it is a very pleasant feeling…

And the management of your B&B?

The services of the B&B are not limited to meals and room cleaning. It will also be necessary to carry out management tasks, such as booking requests, legal requirements (invoices, tax declarations), marketing projects (advertising, promotional offers, partnerships with local companies…), as well as the maintenance of the interior and exterior spaces of your property. There will be no time to get bored!

Forget the 9 to 5 schedule

You understood: the concept of the “9 to 5” schedule is just totally incompatible with the function.

In conclusion, we can say that, if you benefit from some financial flexibility, like social contact and that you are ready not to count your working hours, then managing a guest house is made for you!

Our first theme is now completed. We will continue our analysis in a future article. by defining the objectives & criteria selection of your future Spanish property.

We want to contribute to the success of your B&B in Spain

We invite you to discover this world thanks to our external partner, Patrick. We want to contribute to the success of your project by sharing tips and informative data.

Patrick has created a detailed series of articles related to his extensive experience in the B&B business in Spain. It is a chronological guide starting with the set-up of your B&B project and advising you step by step in order to better manage this professional transition: How to create selection criteria? Where to locate? Administrative work? Marketing?…

The topics are divided into a series of 8 themes and will be published on a regular basis. In the end, you will have all the keys to open the door of your dreams.

Need assistance for your B&B? Ask for more information to Patrick. Our B&B Specialist in Spain

Introduction: How to set up a Bed & Breakfast…and manage it?

Theme 1: Is the life of a B&B Manager for you?

Theme 2: How to select the perfect bed and breakfast in Spain?

Theme 3: The Spanish B&B market

Theme 4: The Top Spanish regions for setting up your B&B

Theme 5: The financial plan for your B&B in Spain

Patrick

B&B adviser, Partner of HowtobuyinSpain

Patrick created and managed his own B&B in Spain for 8 years. He knows the ins and the outs of that business.

About Patrick and his team, our B&B adviser

Patrick has a degree in Applied Economics and a master’s in International Politics. With a financial background, he lived for 8 years in Spain, setting up from scratch and managing a charming B&B. The B&B is still running today.

Patrick advises you on all the major decisions related to the business life of a B&B: B&B Business setting up, B&B estate selection criteria, administrative & legal procedures, Communication strategy and Day to day business.

His expertise covers all the Spanish coastal regions.

Languages: Dutch, French, English, Spanish & Catalan

Looking for a property hunter, a lawyer, an architect,… a local expert in Spain? Ask us directly!

Check the full team of HTBIS here

The post Is the B&B Manager life in Spain made for you? appeared first on How to buy in Spain.