Making money on your 'too big' home

Turning Your Home into a Bed and Breakfast Inn

by Debra Karplus

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Friends often tell you that your home is charming. Maybe it's because of the ornamental gardens outside or the antique furnishings inside. Now that your children are grown up and living on their own, your home has several empty bedrooms.

When you've travelled, you've enjoyed staying at a bed and breakfast establishment many times. You wonder if perhaps you should use your home as a bed and breakfast inn. It could add significantly to your income and certainly make life a bit more interesting.

Using your home as a bed and breakfast inn creates a major lifestyle change for you.

Some people have greater needs for privacy than others. You must be comfortable hosting people who you don't know staying at your home. Your inn guests may be sloppier than you, noisier than you, or may be people that you don't particularly like. You must ask yourself some essential questions. Does your home have enough bathrooms that your guests would have their own? Does the layout of your home and particularly the bedrooms create privacy? Is there ample room outdoors to park cars and to take an evening stroll? Could you put in a play structure for guests with children? You must give these issues some serious thought.

Also, you must really enjoy providing service and amenities, and cooking for others. If you don't love to wake early and cook and serve breakfast and create a memorable dining experience for your guests, then running a bed and breakfast inn may not be for you. You must be able to offer excellent service to each and every guest, because word gets around quickly if you don't.

Treat your bed and breakfast as a business because it is a business!

Managed properly, your bed and breakfast inn has the potential to benefit you financially in a big way; poorly made decisions could be disastrous. Your home may need some major or minor remodeling to make it more comfortable to share with your guests. You need to create a business plan as you would with any business you would start and operate. And then you need to follow your business plan and review and modify it periodically.

Know your competition in your locale, what they offer, and how much they charge per night. Decide if you have a location and curb appeal that will make travelers choose to stay at your inn. Calculate how many guests you can reasonably host. Establish a policy about hosting families with children or with pets. Assess whether your home is accessible for guests with disabilities.

Determine what services you will offer beyond just a place to stay and a morning meal. People like amenities such as free wireless Internet or a hot tub, for example. Or maybe your inn will become popular because of your fabulous blueberry pancakes. Develop a marketing plan to facilitate having an inn that people where people want to stay.

Know the law in your area.

Start by contacting the city or county office that handles zoning issues to see if your address is zoned for commercial use, and specifically zoned to be appropriate to use as an inn. Zoning laws have regulations about parking because homeowners in residential areas typically do not want increased traffic and parked cars in their neighborhoods.

Additionally, you'll want to discuss your plans with your insurance agent who covers your homeowner's policy. You will likely require additional coverage or even an entirely separate insurance policy. A knowledgeable insurance agent should know what to do. You also may want to confer with an attorney who specializes in business and perhaps in home operated businesses.

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Since you will be preparing and serving breakfast, you also need to be aware of any regulations set by your local and state health departments. Many kitchens that prepare food commercially are required to have certain things in their kitchen such as a three-hole sink, for example. Additionally, they may require you, the proprietor and cook, to take a class and pass an exam to obtain a state food handler's permit.

You will also want to understand the federal tax laws regarding your bed and breakfast inn. Many of the improvements and repairs you do to your home will be tax deductible, but you want to make sure your accountant advises you on this issue. You may need to determine what percentage of your property is used for personal use and how much is used as a business enterprise as some expenses may be deductible only for the business portion of your property.

Using your home as a bed and breakfast inn can be fun and lucrative. You need to embark on this very important decision carefully to determine if it is right for you.

Debra is an occupational therapist, accountant, teacher and freelance writer. She is a writer for Advance for Occupational Therapy Practitioners. She also writes for Grand Magazine, has some items (fiction and non fiction) selling on (kindle), has written several travel articles for the Champaign-Urbana News-Gazette and several articles for and volunteers as a money mentor for the University of Illinois Cooperative Extension money mentoring program. Learn more about her at

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