The lodging industry in itself is very much a lifestyle. Travel and tourism is a lifestyle. And incorporating the ownership of a lodging property, regardless of financial performance, can be referred to as ‘lifestyle’. We represent sellers of a variety of distinctive lodging styles such as bed and breakfasts, rental cabins and cottages, boutique hotels and motels. And quite often we see properties that have a combination of the various types units which can often be very desirable as they offer something for everyone. In general, we refer to this as a lifestyle business. And this lifestyle business can take place in a variety of property types. And just because something is considered a ‘lifestyle business’, it doesn’t mean it can’t also be viable or feasible.

We refer to the financial side of this lifestyle business with some key terms you should understand (you should also check out my Top 12 Blog Posts as most are financial related):

“Financially Viable” means inns that generate enough income to cover operating expenses, mortgage, real estate taxes and some amount of owner’s compensation. Everyone’s definition of what is a sufficient owner’s compensation is different. Always remember there are tax benefits from being an inn owner/operator. For more information on that subject, check out my blog post.

“Feasible” means properties with a size and location that have the realistic potential to become financially viable. They may include unique hospitality properties that are under-performing (for health, personal choice or other reasons), closed, distressed, or currently used for other purposes. Often these properties have the upside potential a buyer is looking for, but it might mean the buyer has to put a larger downpayment on the purchase to make the cash flow work until they are able to get the revenue up.

“Lifestyle” means inns and B&B’s whose smaller size and revenues may not generate sufficient income to cover operating expenses, mortgage, real estate taxes. These inns are operated by owners who wish to enjoy the lifestyle of running a bed & breakfast without totally relying upon the business’s revenues. Often owners of an inn in this category have other means of income. This could be a pension, investments, retirement funds, social security, etc. Or maybe one partner works outside the inn.