Questions to Ask When Buying a Bed and Breakfast
For would-be innkeepers talking to the sellers and the broker before making an offer on a bed and breakfast. The questions follow the order the conversation usually takes: occupancy and rates, the books, the building, licenses and zoning, daily life at the inn, and the sale itself. Under each one is a note on the record to ask for, what a careful owner will be able to tell you, and which answers should come from the town or your lawyer instead of the sellers.
The questions
Each question, and why to ask it
Occupancy and rates
How many room nights did you sell in each of the last three years, out of how many you had open to sell?
Why ask it
Ask for the count from the reservation system and work out the percentage yourself. An inn that closes for four months and quotes a high occupancy has sold fewer nights than the figure suggests, and a flat or falling count across three years matters more than one good summer.
What does occupancy look like month by month, and which months do you close or run nearly empty?
Why ask it
The monthly shape tells you when the cash arrives and how long it has to last. A worrying answer is a vague 'it slows down a bit'. Ask to see last January beside last July, and ask what the owners do with the quiet months: repairs, a second job or a rest.
What is the rate for each room in high, shoulder and low season, and what did guests actually pay on average after discounts and packages?
Why ask it
The rate card is what the owners hope to charge; the average collected per night is what the market paid. A wide gap means the published rates are not holding and the house is filling on discounts. Multiply the real average by the nights sold and check that it lands near the room revenue in the accounts.
Where do bookings come from: your own website, the phone, the big booking sites, returning guests or referrals from other businesses?
Why ask it
Most reservation systems record the source of each booking, so ask for the split as a report. A large direct share is the comfortable answer, because it costs no commission and stays with the inn if the website and phone number come with the sale. Heavy reliance on one booking site, or on one wedding venue down the road, is a dependence you would be buying.
What brings people to this town, and what happens to the inn if that one thing changes?
Why ask it
A college, a festival, a ski hill, a hospital or a wedding barn can fill an inn for years and then stop. Have the owners name the three main reasons guests give for coming and roughly how many nights each accounts for. Then check each one yourself: call the venue, read the local paper, look at what the town is planning.
What do the booking sites charge in commission, and is the revenue you are showing me before or after it?
Why ask it
Commission differs by site and by contract, so ask to see a recent statement from each one. If the accounts show the gross amount the guest paid, find the line where commissions come off; if there is none, the profit is overstated by that much.
What do you spend on marketing in a year, and which of it can you trace to bookings?
Why ask it
Have them go line by line: directory and association listings, paid search, the photographer, whoever maintains the website. A sound answer ties at least some of the spending to reservations in the booking report, while 'a bit of everything' means you would be guessing from your first month. Check which listings and memberships are in the owners' own names and would have to be taken out again in yours.
Which rooms sell first, which sit empty, and what do guests say about the ones that sit?
Why ask it
An owner who knows the place will name the favorite room and the problem room without thinking. The reason for the slow one tells you whether it can be fixed: a wall shared with the kitchen is a different job from a bathroom across the hall. Until you have spent the money to change them, count the weak rooms as weak.
How many of last year's guests had stayed before, and do they come back for the inn or for you?
Why ask it
Returning guests are the cheapest bookings there are, and also the most personal. Stories about guests who have become friends are lovely to hear and a warning that some of that loyalty leaves with the sellers. Ask whether they would write to those guests to introduce you.
When did you last raise rates, and how do yours compare with the other inns, the hotels and the vacation rentals nearby?
Why ask it
Rates held flat for years can mean an owner coasting toward retirement, which leaves room for you, or a market that would not take an increase. Look up the competitors for the same weekend before you ask, so you can tell a considered answer from a guess.
How many short-term rentals have opened around here, and what have they done to your midweek and off-season nights?
Why ask it
If the records go back far enough, compare nights sold before and after the rentals arrived. Ask as well how the town regulates them, since a place that restricts whole-house rentals and one that does not are different markets for an inn. Owners who say the rentals have made no difference should be able to show it in the monthly figures.
What income comes from anything other than rooms: weddings, dinners, classes, a gift shelf, packages with local businesses?
Why ask it
Extras can be real money or a great deal of work for very little. Get the revenue and the hours for each, and check that the permits cover it. An inn whose profit depends on a dozen weddings a year is partly an events business, and you should want to run one before you pay for it.
The books
Can I see the income tax returns, the lodging tax filings and the reservation system reports side by side for the same three years?
Why ask it
Three records made for three different readers should tell roughly the same story about revenue. Where an inn collects a lodging or occupancy tax, those filings tie income to dates in a way that is hard to tidy afterward, so ask how that tax is reported where the inn is. A seller who says the real numbers are better than the returns is asking you to pay for income nobody can show.
What did the inn earn in each of those years before your own pay, the mortgage payments and depreciation?
Why ask it
This is the figure a price can be tested against, so find out how it was built and who built it. Take off what your own loan payments would be and see what is left to live on. If it arrives only as a broker's 'adjusted' number, ask for the workings line by line.
Which of your own living costs run through the inn: groceries, utilities, the car, phones, insurance, the mortgage on the part you live in?
Why ask it
Innkeepers live inside the business, so the household and the inn share nearly every bill and the accounts rarely separate them cleanly. A careful seller can point to each personal expense and show the receipt. Be wary when everything personal is added back to profit and nobody mentions that you will have the same costs.
If you paid someone the going wage for every hour you put in, what would be left?
Why ask it
A small inn can show a profit only because its owners work long weeks in exchange for the roof over their heads. That may be a fair trade if you want the life, but it is a job with a house attached, not a return on the price. Run the numbers with local wages for a housekeeper, a cook and a manager, and watch how the owners take the result.
Has the inn ever supported your household on its own, or does one of you have other income?
Why ask it
A pension, a partner's salary or savings from a first career sits quietly behind plenty of inns. Nothing is wrong with that, but you need to know whether you are buying a living or a supplement to one. If there was other income, ask what the inn alone paid for in its best year and in its worst, and set that beside what your own household needs.
What do utilities, insurance, property taxes and supplies cost across a full year, including the months with no guests?
Why ask it
A big old house with a bathroom for every bedroom is expensive to heat, light and insure whether anyone is staying or not. Twelve months of actual bills will show it better than a summary. Property tax and insurance can change for a new owner at a new price, so ask the local assessor and an insurance agent what yours would be.
What do breakfast, laundry and cleaning cost for each occupied room, and who does each of them?
Why ask it
You need this figure to see what a discounted Tuesday night really earns, and plenty of innkeepers have never worked it out. If these owners have not, build it with them from the grocery receipts, the linen bills and the housekeeper's hours. Mark which of the three they do themselves for nothing, because that cost appears the first week you cannot.
How much have you spent on repairs and replacements in each of the last five years, and what have you been putting off?
Why ask it
Spending that falls away in the last two or three years often means an owner who stopped investing once the decision to sell was made, and the building hands that bill to you. Ask for the invoices by year. A list of postponed jobs, offered without embarrassment, is worth more than a claim that nothing needs doing.
Is anything owed that could follow the inn to me: unpaid lodging or property taxes, a loan secured on the building, leased equipment, a bill in dispute?
Why ask it
What a buyer inherits depends on how the sale is structured and on local law, so hand the sellers' answer to your lawyer to check against the public records. The answer you want is a short list with balances and a plan to clear each one at closing. Leased items count in a smaller way: the laundry machines or the phone system may not be the sellers' to include.
The building
How old are the roof, the furnace or boiler, the air conditioning, the water heaters, the plumbing and the wiring, and what has been replaced?
Why ask it
Write a date beside each one and ask for the paperwork. Anything near the end of its life is a cost you can put a figure on and bring to the price. 'It has never given us trouble' is not an age.
Is there enough hot water and water pressure when every room showers within the same hour?
Why ask it
A full house showers between seven and nine, which is a load an ordinary family home never sees. Ask how the system is sized and what happens on a sold-out Saturday. If you are able to stay a night before offering, pick a busy one and find out for yourself.
Is the inn on town water and sewer or on a well and a septic system, and what is that system approved to handle?
Why ask it
A full inn works a septic system far harder than a family would, so ask for the permit, the pumping records and the last inspection. The local health office can tell you what it would require at a sale. With a well, ask for recent water test results and how often testing is required there.
Does every guest room have its own bathroom, and were the ones added later done under a permit?
Why ask it
Bathrooms fitted into old closets are where leaks, slow drains and unpermitted work tend to hide. A good answer comes with dates, the contractor's name and a permit that was signed off. If the paperwork is missing, ask the building department what it has on file before you rely on the room count.
What comes with a house this age: old wiring, lead paint, asbestos, a historic designation that limits what I can change?
Why ask it
None of these has to end the deal, but each changes what a renovation costs and who has to approve it. Find out what has been tested, removed or sealed, and read the reports. For a house that is listed or sits in a historic district, ask the body that oversees it what you could and could not alter.
What has leaked, flooded, cracked, burned or had pests in the years you have owned it?
Why ask it
Every old building has a history, so a flat 'nothing' is less believable than a list. For each event ask what caused it, who repaired it and whether it has come back. Then look at those places yourself: the ceiling under each bathroom, the basement walls, the attic.
Who insures the inn, as what kind of property, and what claims or guest injuries have there been?
Why ask it
Read the policy itself and confirm it is written for a lodging business, covering the building, liability, lost income and the food you serve. Request the claims history in writing. Get your own quote early too: the premium belongs in your budget, and an insurer's questions often turn up things the listing left out.
How well does sound carry between rooms and from the kitchen and the street, and what do guests mention?
Why ask it
Old houses were not built to keep strangers from hearing one another, and soundproofing afterward is costly. Search the reviews for 'thin walls' and 'early' before you ask, then see whether the owners bring it up unprompted. Stand in one room while someone talks in the next.
Will you give my inspector access to everything, including the attic, the basement, the outbuildings and your own quarters?
Why ask it
Hire someone who knows old buildings and, if you can find one, lodging properties, and be there for the visit. Sellers who have looked after the place tend to welcome it and walk along pointing things out. Resistance, or a request to skip the private rooms, shows you where to look hardest.
Licenses and zoning
Which licenses and permits does the inn operate under, and which would I have to apply for again in my own name?
Why ask it
Ask for a copy of each with its expiration date: lodging, food service, business registration, anything for alcohol or signs. What passes to a buyer and what has to be reissued differs from place to place, so confirm each one with the office that issues it. Find out how long a new application takes, since a gap could mean nights you are unable to sell.
What does the zoning allow here: how many guest rooms, whether the owner has to live on site, whether events or dinners for non-guests are permitted?
Why ask it
The seller's answer is the start; the planning office's answer is the one that counts. Rules on room numbers, owner occupancy and events vary widely, and a plan for a hired manager, an extra room or weddings on the lawn may depend on them. Get the answer in writing before you pay for anything else.
Is the inn's use allowed outright, or does it rest on a special permit, a variance or grandfathered status, and does that survive a sale?
Why ask it
Some inns run on permission granted to a particular owner, or on a use that predates the current rules, and either can carry conditions: a cap on rooms, no sign, no closing for longer than a set time. Read the approval itself, conditions included, and have your lawyer confirm what becomes of it at a sale. A seller who is unsure should worry you more than one who hands over the file.
When were the last fire, health and building inspections, and can I read the reports and any correction notices?
Why ask it
A clean, recent report is reassuring. An inn nobody has inspected in years may simply have been overlooked, in which case the first visit could happen on your watch. Look for items written up more than once and ask what was done about each.
What would a new owner be required to bring up to current standards: sprinklers, alarms, exits, accessible rooms, the kitchen?
Why ask it
The sellers may honestly not know, because nobody has asked it of them. In some places a sale or a new license reopens requirements the current owner was excused from, so the fire and building officials for this address are the people to ask. Get a contractor's price for anything they name before you settle on an offer.
What does your food permit let you serve: a full cooked breakfast, afternoon baking, dinners, wine?
Why ask it
What a kitchen may serve, and to whom, depends on how it is licensed, and some inn kitchens are approved only for breakfast for overnight guests. Dinners, cooking classes or a glass of wine at check-in might each need a different license or changes to the kitchen itself. Leave that income out of your figures until you know what it would take here.
Have the neighbors or the town ever complained about parking, noise, signs or events here, and is anything still open?
Why ask it
An inn on a residential street lives on its neighbors' patience, and a complaint on file can come up again when a permit is renewed or a new owner applies. Count the parking spaces against the guest rooms while you are there and see where the cars actually end up. A seller who names the one neighbor who objected, and what settled it, is more useful than one who says everybody loves the inn.
Daily life
Walk me through an ordinary day in high season, from your first alarm to the last guest checked in.
Why ask it
Let them talk without interruption and write down the times. You are listening for the length of the day and for the hours that cannot be moved: breakfast prep before dawn, rooms turned by mid-afternoon, a late arrival at ten. If the day they describe sounds like one you would want, that counts for a lot.
In high season and in the quiet months, how many hours a week does the inn take, and how is the work divided between you?
Why ask it
If two people run the inn, put this to each of them and compare: the totals rarely match, and the gap shows who carries the work nobody counts. The quiet-month figure matters as much as the summer one, since that is when the painting, the bookkeeping and the deep cleaning get done. A sole owner's answer tells you whether one person can really do this.
Who works here besides you, what does each person do and earn, and have they said whether they would stay?
Why ask it
A housekeeper who has turned these rooms for ten years knows things no manual will tell you, and losing that person in your first month would hurt. Find out how each person is paid and whether anything has been promised to them. Staff often do not know the inn is for sale, so ask when you may meet them.
When did you last take a week off, and who ran the inn while you were gone?
Why ask it
Some owners hire a relief innkeeper, some lean on a grown child or a neighbor, and some block the calendar and lose the nights. Each of those has a price, so ask what it came to. Owners who cannot remember their last week away are telling you the inn does not run without them, and cover that was a favor from their family is not coming with the building.
Which jobs do you do yourselves that I might have to pay for: repairs, gardening, bookkeeping, baking, the website, the photographs?
Why ask it
Owners who are handy, or who came from accounting or marketing, save the inn a good deal without it ever showing in the books. Go down their list honestly against your own skills. Whatever you cannot do is a cost the profit figure has not allowed for.
Who cooks breakfast, what do you serve, and how do you cope with allergies, special diets and a full house?
Why ask it
Breakfast is half the name and a large part of what guests write about. Look at a week of menus, the shopping routine and how dietary requests are recorded at booking. If one of the owners trained as a cook and the recipes exist only in memory, ask for them in writing as part of the handover, and be honest about whether you could match the cooking.
How do check-ins work, and how often are you needed late in the evening or in the middle of the night?
Why ask it
Some inns greet every guest at the door; others use a key code and a note. Greeting in person is part of the charm and ties you to the house every afternoon and evening. Find out what guests here expect, because a change will show up in the reviews.
Which complaints turn up again and again in the guest reviews, and which of them could a new owner fix?
Why ask it
Read the last two years of reviews on every site before this conversation, so you already know the answer. Owners who name the same faults you found, without getting defensive, are giving you a reliable account of everything else. Sort the complaints into those money can fix and those the building will always have.
Where exactly do you live, how much of it is private, and does it have its own entrance, kitchen and bathroom?
Why ask it
Owner's quarters range from a separate cottage to a bedroom behind the kitchen, and listings are generous with the phrase. Walk through and picture your own furniture, your own evenings and the place you would eat a meal away from the guests' table. Check whether the space is counted in the rooms or the square footage you were quoted.
Can you shut a door on the inn from your quarters, and would the space work for children, a pet or a partner with a job elsewhere?
Why ask it
What can they hear from their bed, and how often does a guest knock? People who raised a family in the quarters will say plainly what was hard about it. If your household is larger than theirs, work out which guest room you would have to take over and take its income out of your numbers.
The sale
Why are you selling the inn now, and what do you plan to do once it is sold?
Why ask it
Retirement after many years is easy to believe when the plans that follow are concrete. Tired owners are worth understanding too: find out what wore them out, since the same thing will be waiting for you. A reason that changes between the seller and the broker deserves a second conversation.
How long has the inn been for sale, at what prices, and what did earlier buyers say when they walked away?
Why ask it
Inns can take a long time to sell, so months on the market are not damning in themselves. What matters is why offers fell through: the financing, an inspection, the zoning or the numbers. Put this one to the broker as well and see whether the two accounts match.
How is the asking price divided among the real estate, the business and the furnishings, and what is each part based on?
Why ask it
A price that is mostly the value of a large house is a different purchase from one resting on the inn's earnings, and lenders and tax advisers may treat the parts differently. Ask your own lender and accountant how they would see the split. If nobody can say where the business portion came from, the earnings probably do not support it.
What have comparable inns in this region sold for recently, and how were those purchases financed?
Why ask it
This one is for the broker. You want completed sales with dates, room counts and prices, not asking prices from current listings. How other buyers paid tells you which lenders understand inns and whether sellers around here tend to carry part of the price.
Do the name, the website and domain, the phone number, the email list and the social media accounts all come with the sale?
Why ask it
List each one in the offer, with the login and the name of whoever is registered as its owner today. A domain held in a nephew's account or a phone number on the seller's personal plan can take weeks to untangle. These are how past guests find the inn, so they deserve the same care as the furniture.
Can the review profiles and the listings on the booking sites move to me with their history intact?
Why ask it
Years of reviews are a large part of what you are paying for, and each platform sets its own rules on a change of ownership. Have the sellers list every site they appear on, then ask each site how a transfer works and whether the history stays. Where you can, get the platform's answer in writing.
How many nights are already booked beyond the closing date, at what rates, and who holds the deposits?
Why ask it
Forward bookings are your first months of income, so ask for the report on the day you offer and again just before closing. Deposits already paid are for stays you will be hosting, and the contract should say how they are handed over. A thin calendar ahead may mean the sellers stopped taking bookings or stopped marketing: ask which.
Are there gift certificates, wedding contracts, long-stay deals or promises to regular guests that I would be expected to honor?
Why ask it
Each of these is a commitment made at someone else's price. Ask for a written list with amounts and dates, and decide with your lawyer which you will take on and how the price accounts for them. The regular who has had the same room at the same rate for fifteen years belongs on that list too.
Which reservation system do you use, and will the guest records, past bookings and rate history be handed over?
Why ask it
The guest history is how you write to past visitors and how you learn what each season really did. Find out whether the subscription can be reassigned or the data has to be exported, and whether guests agreed to be contacted. An inn run from a paper reservation book can still be a good inn, but allow time to build what is missing.
Which furnishings, linens, kitchen equipment and artwork stay, and can an inventory be attached to the offer?
Why ask it
Walk the rooms with the sellers and mark what leaves with them, because the four-poster in the photographs may be a family piece. What stays should match what guests see on the website. A list with photographs, attached to the offer, prevents the argument at closing.
How long will you stay on to train me, and will you introduce me to returning guests, suppliers and the businesses that send you bookings?
Why ask it
A few weeks beside the sellers through real check-ins and breakfasts teaches more than any manual. Agree on the length, the hours and whether it is paid, and put it in the contract. Sellers who offer a letter to their guests and a round of introductions in town are showing you they want the inn to do well after them.
Would you finance part of the price yourselves, and on what terms?
Why ask it
A seller prepared to be paid over time is betting on the figures they have shown you, which is its own kind of evidence. A flat no is not a bad sign in itself, since some sellers need the whole amount to retire or to buy their next home, so ask why. If the answer is yes, the rate, the term and what happens after a missed payment all go to your lawyer and your lender.
If you are staying in the area, would you agree not to run or help run another inn within a set distance?
Why ask it
This counts most where guests know the sellers by name. Former owners who buy a house two streets away and start hosting friends of the inn as paying guests become your nearest competitor. Hear what they intend first, then have your lawyer say what kind of promise can be enforced where the inn is, because that varies a good deal.
How to question the sellers of a bed and breakfast
Practical guidance for the conversation itself
Before you visit
Ask how the sellers want visits handled
Guests and staff often do not know an inn is for sale, and many brokers ask for a confidentiality agreement before they release anything. Agree with the broker who you may speak to and when, and do not raise the sale with a housekeeper or a guest until the sellers say you can.
Stay a night if you can
One night as an ordinary guest answers a dozen questions without asking: the hot water at eight in the morning, the noise through the wall, the breakfast, the welcome. Pick a busy weekend. If the sellers would rather you did not, stay at a competitor nearby and see what the inn is up against.
Get the records before the conversation
Request the occupancy report, three years of tax returns and the lodging tax filings ahead of the visit. With those read, Occupancy and rates and The books become a matter of asking about what you noticed, which is quicker and harder to answer vaguely.
Call the town yourself
Most of Licenses and zoning should go to the offices that decide, not only to the people selling. A call to the planning, health and fire departments about the address costs nothing and tells you what a change of owner involves there. Make those calls only once the broker agrees, since they can make the sale public.
At the inn
Hear from both owners
Where two people own the inn, one often runs the kitchen and the guests and the other the building and the books. Put the Daily life questions to each of them, separately if it happens naturally. Where their answers on hours or time off differ, the longer figure is usually the truer one.
Walk the working parts
Anyone can show a guest room. Ask to see the laundry, the linen storage, the boiler room, the basement, the kitchen during cleanup and the owners' quarters. These are the rooms you would spend your days in, and their condition says more about upkeep than the parlor does.
Ask for the document, then the story
For anything with a number or a date, ask what record it comes from and whether you can have a copy. Then ask what happened: the winter the pipes froze, the season the festival was cancelled. Owners who kept good records usually enjoy telling the stories that go with them.
Keep the broker's answers apart
A listing broker normally works for the sellers. Note which answers came from the broker and which from the owners, and put the questions about price, earlier offers and comparable sales to both. Agreement between them is reassuring; a gap is your next question.
Reading the answers
Rebuild the income from the nights
Take the nights sold, multiply by the average rate actually collected, and add any other income. The result should sit close to the revenue on the tax return. If it does not, one of the three figures is wrong, and you need to know which before you talk about price.
Put your own household into the numbers
Start from the earnings before the owners' pay. Subtract your loan payments, wages for any work you will not do yourself, and a yearly allowance for repairs. What remains is what you would live on, and it is the number to compare with the job or the savings you would be giving up.
Sort what you learn into three piles
Some answers lower the price: an old roof, a weak room, a booking site taking a large cut. Some are conditions to write into the offer: a license being reissued, a septic inspection, the transfer of the website. A few end the conversation, such as zoning that does not allow what the inn is doing.
Have your own advisers check the rest
A lawyer who handles business sales in that area, an accountant and a lender who has financed lodging before will each see things this list cannot. What transfers, what is taxed and what can be enforced all depend on where the inn is. Bring them the sellers' answers and ask what they would verify.
Reasons to slow down or walk away
Numbers that exist only in conversation
Cash income that never reached the tax return cannot be checked, is unlikely to count with a lender and should not count with you. Pay for what the records show.
An inn that is really its owners
When every review names the hosts and the returning guests are personal friends, part of what you are buying leaves at closing. That can still work, with a long handover and a lower price, but go in knowing it.
A sale that depends on plans the town has not approved
A listing may describe room for more guest rooms, a wedding lawn or a restaurant. Until the planning office confirms it in writing, value the inn on what it is permitted to do today.
A life you would not want
If the high-season day the owners described made your heart sink, no set of figures fixes that. Working a few weeks at an inn, or taking a course for aspiring innkeepers, is a cheap way to find out before you buy one.