Changing a Bed and Breakfast (with cottages) to an Airbnb

[Michael Furcron]

Hi Everyone,

Looking for thoughts, opinions, things to consider...

My Wife and I run 4 Airbnbs, 3 on one property including a Tugboat, Airstream and log cabin on a large property an 8 acre completely private lake. We live on the same property.

We are considering purchasing a Traditional Bed and Breakfast on a farm in wine country and transforming it to run more like an Airbnb. There are 6 Cottages (technically 8 units as 2 have suites above as well) on 40 acres (most fairly close to each other), a 5 bed 5 bath house with commercial kitchen, pool etc... Kitchen has operated as a fancy restaurant in the past. One of the cabins was built in 1699, the house and other cabins were built in the mid 1700s.. Each has a fireplace, full bath, small fridge, microwave. There is a lot of room for improvement on the property. I would probably add an outdoor kitchen area, game barn, game room/theater in the house, in addition to slowly redecorating and upgrading bathrooms to be more spa like.  We may rent rooms in the house separately or the the whole house at once.  They are currently getting 225 avg per cabin (with the above units barely rented). and 175-200/ for rooms in the house. 

I know we would lose some of their customer base as we would not be providing breakfast or be there when they arrive. I think the in house room rentals would take the biggest hit(they aren't doing as well as the cabins anyway), but maybe could get some whole house bookings instead.  It's 12 minutes from our other property which is why I think we might be able to swing it.  There is opportunity to host small weddings/ events/ retreats etc.. too. 

They are asking about 2 million with 600-650 gross and 0-200k net depending on the year (I need a deeper dive into the P&Ls as some of the expenses may be flowing back to the owners).

If I can get the 6 cottages to 250/night with 50% booked, I believe we would break even. I think there is a good opportunity to use the kitchen to host catered events and sell tickets vs a restaurant that i don't want to run and of course use it for weddings and guests events.

Are we nuts or on to something... anyone changed a BnB to an Airbnb before?

Thanks,

Mike