Saturday, August 21, 2004
1031 and NEW Ways to Build
BUILDING VALUE
IRS Approves More Ways
To Use 1031 Exchanges
An article in the Wall Street Journal by Staff Reporter Ray A. Smith sites recent rulings by the Internal Revenue Service on 1031 exchanges that " could pave the way for more investors to conduct such transactions using property being built on vacant land.”
In the past, it has been uncertain about how the IRS views 1031 transactions in which you, the investor, choose to use the proceeds from a property sale to build on vacant land. Could construction on land be considered replacement property? Investors wondered.
But the two recent rulings say these kinds of transactions CAN qualify as 1031 exchanges.
MORE on this at the following URL:
http://online.wsj.com/article/0,,SB106013179745515000,00.html
IRS Approves More Ways
To Use 1031 Exchanges
An article in the Wall Street Journal by Staff Reporter Ray A. Smith sites recent rulings by the Internal Revenue Service on 1031 exchanges that " could pave the way for more investors to conduct such transactions using property being built on vacant land.”
In the past, it has been uncertain about how the IRS views 1031 transactions in which you, the investor, choose to use the proceeds from a property sale to build on vacant land. Could construction on land be considered replacement property? Investors wondered.
But the two recent rulings say these kinds of transactions CAN qualify as 1031 exchanges.
MORE on this at the following URL:
http://online.wsj.com/article/0,,SB106013179745515000,00.html
1031 Exchanges & The Role of The Qualified Intermediary
Certainly, a Qualified Intermediary is essential in your 1031 Exchange transaction.
The National Association of Realtors' (NAR) report on that subject makes this clear. The NAR report is entitled The Role of the Qualified Intermediary. This and other relevant reports can be found by following this link:
http://63.123.136.2:28122/1031%20literature.htm#The_Basic_Rules_For_A_1031_Exchange
The Qualified Intermediary is the glue that puts the buyer and seller of property together into the form of a 1031 Exchange. Where such an intermediary (often called an exchange facilitator) is used, the intermediary will not be considered the agent of the taxpayer for constructive receipt purposes notwithstanding the fact that he may be an agent under state law and the taxpayer may gain immediate possession of the money or property under the laws of agency.
In order to take advantage of the qualified intermediary "safe harbor" there must be a written agreement between the taxpayer and intermediary expressly limiting the taxpayer's rights to receive, pledge, borrow or otherwise obtain the benefits of the money or property held by the intermediary.
A qualified intermediary is formally defined as a person who is not the taxpayer or a disqualified person who enters into a written agreement (the "exchange agreement") with the taxpayer and, as required by the exchange agreement, acquires the relinquished property from the taxpayer, transfers the relinquished property, acquires the replacement property, and transfers the replacement property to the taxpayer.
The qualified intermediary does not actually have to receive and transfer title as long as the legal fiction is maintained. The intermediary can act with respect to the property as the agent of any party to the transaction and further, an intermediary is treated as entering into an agreement if the rights of a party to the agreement are assigned to the intermediary and all parties to the agreement are notified in writing of the assignment on or before the date of the relevant transfer of property.
This provision allows a taxpayer to enter into an agreement for the transfer of the relinquished property (i.e., a contract of sale on the property) and thereafter to assign his rights in that agreement to the intermediary. Providing all parties to the agreement are notified in writing of the assignment on or before the date of the transfer of the relinquished property, the intermediary is treated as having entered into the agreement and, upon completion of the transfer, as having acquired and transferred the relinquished property.
There are no licensing requirements for Intermediaries. They need merely be not an unqualified person as defined by the Internal Revenue Code in order to be qualified. The Code prohibits certain "agents" of the taxpayer from being qualified. Accountants, attorneys and realtors who have served taxpayers in their professional capacities within the prior two years are disqualified from serving as a Qualified Intermediary for a taxpayer in an exchange.
MORE on 1031 Like-Kind Exchanges can be found at this link:
http://www.janeanne.com/resources.asp
The National Association of Realtors' (NAR) report on that subject makes this clear. The NAR report is entitled The Role of the Qualified Intermediary. This and other relevant reports can be found by following this link:
http://63.123.136.2:28122/1031%20literature.htm#The_Basic_Rules_For_A_1031_Exchange
The Qualified Intermediary is the glue that puts the buyer and seller of property together into the form of a 1031 Exchange. Where such an intermediary (often called an exchange facilitator) is used, the intermediary will not be considered the agent of the taxpayer for constructive receipt purposes notwithstanding the fact that he may be an agent under state law and the taxpayer may gain immediate possession of the money or property under the laws of agency.
In order to take advantage of the qualified intermediary "safe harbor" there must be a written agreement between the taxpayer and intermediary expressly limiting the taxpayer's rights to receive, pledge, borrow or otherwise obtain the benefits of the money or property held by the intermediary.
A qualified intermediary is formally defined as a person who is not the taxpayer or a disqualified person who enters into a written agreement (the "exchange agreement") with the taxpayer and, as required by the exchange agreement, acquires the relinquished property from the taxpayer, transfers the relinquished property, acquires the replacement property, and transfers the replacement property to the taxpayer.
The qualified intermediary does not actually have to receive and transfer title as long as the legal fiction is maintained. The intermediary can act with respect to the property as the agent of any party to the transaction and further, an intermediary is treated as entering into an agreement if the rights of a party to the agreement are assigned to the intermediary and all parties to the agreement are notified in writing of the assignment on or before the date of the relevant transfer of property.
This provision allows a taxpayer to enter into an agreement for the transfer of the relinquished property (i.e., a contract of sale on the property) and thereafter to assign his rights in that agreement to the intermediary. Providing all parties to the agreement are notified in writing of the assignment on or before the date of the transfer of the relinquished property, the intermediary is treated as having entered into the agreement and, upon completion of the transfer, as having acquired and transferred the relinquished property.
There are no licensing requirements for Intermediaries. They need merely be not an unqualified person as defined by the Internal Revenue Code in order to be qualified. The Code prohibits certain "agents" of the taxpayer from being qualified. Accountants, attorneys and realtors who have served taxpayers in their professional capacities within the prior two years are disqualified from serving as a Qualified Intermediary for a taxpayer in an exchange.
MORE on 1031 Like-Kind Exchanges can be found at this link:
http://www.janeanne.com/resources.asp
Friday, August 13, 2004
1031 exchange FAST FACTS links!
1031 Exchange Manual,
(1031 Corporation, 2003).
An overview of real estate like-kind exchanges,
(The Appraisal Journal, July 2003).
20 questions about deferred realty exchanges under IRC Sec. 1031,
(The CPA Journal, May 2003).
Review the fundamentals of Section 1031 like-kind exchanges,
(Commercial Investment Real Estate, Jan./Feb. 2003).
Shelter gains with a swap; With real estate investing hot, a tax-cut strategy takes center stage, (Money Magazine, Aug. 2002).
Real Estate Exchange under Section 1031,
(Real Estate Center Report No. 932, 1995/2000).
How to make tax time less costly,
(Realty Times, Feb. 4, 2002).
Section 1031 - Tax-deferred exchanges: 'Real estate's best-kept secret for tax relief',
(Real Estate Issues, Winter 2000-2001).
For more information and narratives on the excellent advantages of the 1031 exchange,
please scroll down the page!
(1031 Corporation, 2003).
An overview of real estate like-kind exchanges,
(The Appraisal Journal, July 2003).
20 questions about deferred realty exchanges under IRC Sec. 1031,
(The CPA Journal, May 2003).
Review the fundamentals of Section 1031 like-kind exchanges,
(Commercial Investment Real Estate, Jan./Feb. 2003).
Shelter gains with a swap; With real estate investing hot, a tax-cut strategy takes center stage, (Money Magazine, Aug. 2002).
Real Estate Exchange under Section 1031,
(Real Estate Center Report No. 932, 1995/2000).
How to make tax time less costly,
(Realty Times, Feb. 4, 2002).
Section 1031 - Tax-deferred exchanges: 'Real estate's best-kept secret for tax relief',
(Real Estate Issues, Winter 2000-2001).
For more information and narratives on the excellent advantages of the 1031 exchange,
please scroll down the page!
Section 1031 of the U.S. Internal Revenue Code
Section 1031 of the U.S. Internal Revenue Code opens a very lucrative way for investors to defer capital gains taxes on the exchange of like-kind properties.
1031, Starker, or tax-deferred exchanges, as they are called, have excellent advantages for you as an investor. To find out more about the possibilities for you, please use the links provided here. Together with the information you will find as you read into his BLOG, look for other informative and helpful resources at http://www.janeanne.com/resources.asp
--resources for use as you develop your 1031 Plan.
janeAnne.com happily will put you touch with legal, tax and intermediary professionals, all available to offer their services—services you will need for the time-sensitive 1031 transaction.
Please contact us at Mountain Homes and Land Legacies in the Asheville area to talk with us about a variety of investment opportunities. Here is the fastest connection: 1031@janeAnne.com
Check out these 1031 Like-Kind Exchange related links, too!
NATIONAL ASSOCIATION OF REALTORS
http://www.realtor.org/libweb.nsf/pages/fg408
INTERNAL REVENUE SERVICE http://www.irs.gov/businesses/small/industries/article/0,,id=98491,00.html
1031 EXCHANGE
http://homebuying.about.com/cs/1031exchange/a/1031_exchanges.htm
1031, Starker, or tax-deferred exchanges, as they are called, have excellent advantages for you as an investor. To find out more about the possibilities for you, please use the links provided here. Together with the information you will find as you read into his BLOG, look for other informative and helpful resources at http://www.janeanne.com/resources.asp
--resources for use as you develop your 1031 Plan.
janeAnne.com happily will put you touch with legal, tax and intermediary professionals, all available to offer their services—services you will need for the time-sensitive 1031 transaction.
Please contact us at Mountain Homes and Land Legacies in the Asheville area to talk with us about a variety of investment opportunities. Here is the fastest connection: 1031@janeAnne.com
Check out these 1031 Like-Kind Exchange related links, too!
NATIONAL ASSOCIATION OF REALTORS
http://www.realtor.org/libweb.nsf/pages/fg408
INTERNAL REVENUE SERVICE http://www.irs.gov/businesses/small/industries/article/0,,id=98491,00.html
1031 EXCHANGE
http://homebuying.about.com/cs/1031exchange/a/1031_exchanges.htm
The 1031 Exchange: An Intriguing Perspective and Examples
The 1031 Exchange: An Intriguing Perspective and Examples
A wide variety of properties can be considered “like-kind”. We DO have a latitude and an intriguing perspective from which to make choices under the 1031 Exchange plan. Think of it this way: “like-kind” does NOT refer to the nature, character or type of property. Instead, it is all about the intended use of the property.
Provided the property is initially acquired and held for either business or investment purposes, it can qualify as a suitable replacement property under IRC Section 1031. Also, real properties generally are of a “like kind”, regardless of whether the properties are improved or unimproved.
Here are a few examples.
1031 Exchange Examples...ASK janeAnne@janeAnne.com
about current listings and possibly exchanging
* A Professional office in Manhattan for a Mountain cabin and land that you will lease
* A Condo in California for Unimproved Land with a Waterfall in the Asheville area
* A Single family rental in Chicago for multi family rental in West Asheville
* Non income providing raw land in Florida for income producing rental property in the beautiful Appalachians of Western North Carolina
* An apartment building in downtown Detroit for an office building in "up-and-coming" Mars Hill, North Carolina
* Our B&Bs ready for you to buy.
* Horse Farms and Equine properties.
FYI: The Section 1031 Code was amended in 1989 rendering property outside the United States NON “like-kind”.
Remember: Investors do NOT have to exchange for exactly the same type of property.
ASK janeAnne about 1031 Exchanges janeAnne@janeAnne.com
A wide variety of properties can be considered “like-kind”. We DO have a latitude and an intriguing perspective from which to make choices under the 1031 Exchange plan. Think of it this way: “like-kind” does NOT refer to the nature, character or type of property. Instead, it is all about the intended use of the property.
Provided the property is initially acquired and held for either business or investment purposes, it can qualify as a suitable replacement property under IRC Section 1031. Also, real properties generally are of a “like kind”, regardless of whether the properties are improved or unimproved.
Here are a few examples.
1031 Exchange Examples...ASK janeAnne@janeAnne.com
about current listings and possibly exchanging
* A Professional office in Manhattan for a Mountain cabin and land that you will lease
* A Condo in California for Unimproved Land with a Waterfall in the Asheville area
* A Single family rental in Chicago for multi family rental in West Asheville
* Non income providing raw land in Florida for income producing rental property in the beautiful Appalachians of Western North Carolina
* An apartment building in downtown Detroit for an office building in "up-and-coming" Mars Hill, North Carolina
* Our B&Bs ready for you to buy.
* Horse Farms and Equine properties.
FYI: The Section 1031 Code was amended in 1989 rendering property outside the United States NON “like-kind”.
Remember: Investors do NOT have to exchange for exactly the same type of property.
ASK janeAnne about 1031 Exchanges janeAnne@janeAnne.com
Tuesday, August 03, 2004
ASHEVILLE #1 for Investing in a Second Home
Top 10 Towns for Second Home Investment
RISMEDIA, Oct. 9—EscapeHomes (www.escapehomes.com), one of America's foremost online sources for vacation homes, has identified the top vacation towns as a resource for investor's who want to buy a second home or vacation home and diversify their portfolios. The list was researched in response to investor interest in vacation real estate as an alternative to declining stock market values.
The Top 10 towns for investing in a second home are:
Asheville, North Carolina
Ashland, Oregon
Beaufort, South Carolina
Daytona Beach, Florida
Myrtle Beach, South
Carolina Park City, Utah
Port Townsend, Washington
South Lake Tahoe, California
Sunriver, Oregon
Charlevoix, Michigan
Escape Homes http://www.escapehomes.com/cities/Asheville/
writes of Asheville:
"If you love golf and the mountain lifestyle, you will love Asheville, North Carolina. In addition to golfing any of the 18 different nearby golf courses, you can spend your time hiking the Appalachian Trail, whitewater rafting, fly-fishing, or snow skiing. For those who aspire to become an artist, Asheville offers many local galleries to show your work, or even painting classes to perfect your skills."
The site goes on to say, " Not an artist? Perhaps perusing the local antique shops located downtown will suit you. Everyone can admire the Biltmore House, America's largest private residence with 250 rooms, built in the late 1800's by the Vanderbilt Family. On a more reasonable scale, you will find many vacation homes and golf vacation rentals. No matter what your interests, you will enjoy the quaint downtown setting in Asheville. Population: 66,500
The TOP 10 TOWNS FOR INVESTING list was compiled by cross-referencing consumer interest in vacation towns on Escapehomes.com with the percentage of equity growth in each town over the last five years. This Top 10 list reflects current market trends and uncovers a few new hot spots for purchasing and investing in a second home.
Of the towns listed 50% have a median price below the national average price for a second home of $162,000. All towns shown have seen considerable growth and have increased in property value an average of more than 10% per year over the last five-years.
Current market conditions combined with low interest rates provide second-home buyers a high-return alternative to declining stock market values.
"Vacation homes and second homes have become one of the few golden investment opportunities," says Clark Thompson, CEO of EscapeHomes.
http://www.escapehomes.com/cities/Asheville/
RISMEDIA, Oct. 9—EscapeHomes (www.escapehomes.com), one of America's foremost online sources for vacation homes, has identified the top vacation towns as a resource for investor's who want to buy a second home or vacation home and diversify their portfolios. The list was researched in response to investor interest in vacation real estate as an alternative to declining stock market values.
The Top 10 towns for investing in a second home are:
Asheville, North Carolina
Ashland, Oregon
Beaufort, South Carolina
Daytona Beach, Florida
Myrtle Beach, South
Carolina Park City, Utah
Port Townsend, Washington
South Lake Tahoe, California
Sunriver, Oregon
Charlevoix, Michigan
Escape Homes http://www.escapehomes.com/cities/Asheville/
writes of Asheville:
"If you love golf and the mountain lifestyle, you will love Asheville, North Carolina. In addition to golfing any of the 18 different nearby golf courses, you can spend your time hiking the Appalachian Trail, whitewater rafting, fly-fishing, or snow skiing. For those who aspire to become an artist, Asheville offers many local galleries to show your work, or even painting classes to perfect your skills."
The site goes on to say, " Not an artist? Perhaps perusing the local antique shops located downtown will suit you. Everyone can admire the Biltmore House, America's largest private residence with 250 rooms, built in the late 1800's by the Vanderbilt Family. On a more reasonable scale, you will find many vacation homes and golf vacation rentals. No matter what your interests, you will enjoy the quaint downtown setting in Asheville. Population: 66,500
The TOP 10 TOWNS FOR INVESTING list was compiled by cross-referencing consumer interest in vacation towns on Escapehomes.com with the percentage of equity growth in each town over the last five years. This Top 10 list reflects current market trends and uncovers a few new hot spots for purchasing and investing in a second home.
Of the towns listed 50% have a median price below the national average price for a second home of $162,000. All towns shown have seen considerable growth and have increased in property value an average of more than 10% per year over the last five-years.
Current market conditions combined with low interest rates provide second-home buyers a high-return alternative to declining stock market values.
"Vacation homes and second homes have become one of the few golden investment opportunities," says Clark Thompson, CEO of EscapeHomes.
http://www.escapehomes.com/cities/Asheville/
Attention Condo Buyers
Attention Condo Buyers:
3 Warning Signs That Could Cost You Thousands of Dollars
If you are in the market for a condo, be sure to ask you REALTOR about the following... they could be warning signs that could be financially costly to you.
1. Fifty (50) percent or more of the units are tenant (renter as opposed to owner) occupied.
If 50 percent or more of the units are rentals, it may be more difficult to find a lender to loan money for a unit in the complex. If few lenders will make loans, this may impact you when you want to resell.
2. The association's "reserve fund" is less than healthy.
The association does not have a healthy reserve fund. Without a large sum of money in reserve, when a major repair needs to be done, owners might have to pay a costly special assessment. This can affect resale value.
3. The project is in litigation.
If the project is involved in litigation with builders and/or other homeowners, this can quickly deplete reserve funds and affect resale value.
For totally awesome CONDOS in the Greater Asheville area with none of the above neagtives. please contact our CONDO specialist at CONDO@janeAnne.com
3 Warning Signs That Could Cost You Thousands of Dollars
If you are in the market for a condo, be sure to ask you REALTOR about the following... they could be warning signs that could be financially costly to you.
1. Fifty (50) percent or more of the units are tenant (renter as opposed to owner) occupied.
If 50 percent or more of the units are rentals, it may be more difficult to find a lender to loan money for a unit in the complex. If few lenders will make loans, this may impact you when you want to resell.
2. The association's "reserve fund" is less than healthy.
The association does not have a healthy reserve fund. Without a large sum of money in reserve, when a major repair needs to be done, owners might have to pay a costly special assessment. This can affect resale value.
3. The project is in litigation.
If the project is involved in litigation with builders and/or other homeowners, this can quickly deplete reserve funds and affect resale value.
For totally awesome CONDOS in the Greater Asheville area with none of the above neagtives. please contact our CONDO specialist at CONDO@janeAnne.com
B&B FOR SALE ~Asheville
The sign just inside the gate reads,
“BED & BREAKFAST FOR SALE”
The couple paused as they wandered down the sidewalk in a village not far from Asheville. They had spotted a sign by the rose arbor just inside the gate of a charming B&B on that tree-lined street. Decorated in hand-painted roses and green filigrees, it read, “ Village Rose Bed & Breakfast for Sale, call xyzReal Estate.” The couple looked at each other, grabbed hands, and you could almost see their eyes light up. Just in that moment, they had found their dream. It was a longtime coming true, but now, they were very close to making it a reality.
NOTE: The B&B you desire may very well NOT be listed in our MLS system. B&B gems are not likely to be advertised on the Internet, either. Most often we Real Estate professionals hear about such treasures by word-of-mouth as we talk with our colleagues and neighbors. A sweet B&B may be available IF you know how to find one…and we do! . B&B4Sale@www.janeAnne.com
The notion of finding and owning the “perfect” B&B is intriguing. The mountain landscapes in the Greater Asheville, the coves with historic homes nestled in the greenery, the picturesque villages, and of course, the Biltmore Estate seem to call tourists to Western North Carolina. This is an area where tourists are welcomed. It is conducive to the B&B business.
If the B&B business truly catches your fancy, you may want to begin to lay the groundwork for ownership, just as I suspect the couple I described above had done. Plan overnights at local B&Bs and then extend your range, keeping in mind the locale and the real property values and availability to you. Perhaps the “right” B&B will cross your path.
To speed you on your way, I have prepared a brief overview including a bit of information on the history of contemporary B&Bs, and on how owning one might work for YOU... see the following posts.
*****By the way, if you have already done the investigation, and made the decision to invest your time, talent, energy and money in a B&B, please DO make contact with haste. I have personal experience in the B&B business, and stand ready to help you locate the perfect property in Western North Carolina for you. Just drop us a note at B&B4Sale@janeAnne.com
A BIT OF B&B HISTORY
The B&B business is not new on the scene. Travelers abroad have enjoyed stays at inviting B&Bs for a very long time. By the late 1960s, delight arising from remembered stays in European B&Bs made its way home with some of those travelers. They began to open their own versions of those establishments, and commenced to offer the familiar small lodging atmosphere in the U.S.A.
Now, thousands of B&Bs dot the highways and byways of America, and a maturing industry with a number of associations and support services, professional newsletters, travel publications, guidebooks, and vendors catering to small lodges also have appeared on the scene.
THE SPECIAL REWARDS OF BEING A B&B OWNER
The B&B business is not for everyone, but if YOU are attracted to it, the rewards can be immense. What owners of B& Bs tell me they like best about the business varies. Some say they enjoy meeting and conversing with their guests, some say the “very nice” income and the independence from a corporate regime is a plus for them. Others appreciate the business as a pleasant way of life. Every now and then, restoring an historic building motivates the potential B&B owners, and we do have wonderful old historic buildings in the Greater Asheville area just waiting for your loving touch.
There is a consensus that great satisfaction arises from “growing” and creating a valuable investment. Success does have something to do with the way one approaches the business. In this business, more than many perhaps, one’s style, the personality of the B&B itself, unique hospitality, standards of excellence, and creative marketing plans really count.
For a small town B&B for sale in the Greater Asheville area,
please check out this link:
http://www.janeanne.com/listings.asp
“BED & BREAKFAST FOR SALE”
The couple paused as they wandered down the sidewalk in a village not far from Asheville. They had spotted a sign by the rose arbor just inside the gate of a charming B&B on that tree-lined street. Decorated in hand-painted roses and green filigrees, it read, “ Village Rose Bed & Breakfast for Sale, call xyzReal Estate.” The couple looked at each other, grabbed hands, and you could almost see their eyes light up. Just in that moment, they had found their dream. It was a longtime coming true, but now, they were very close to making it a reality.
NOTE: The B&B you desire may very well NOT be listed in our MLS system. B&B gems are not likely to be advertised on the Internet, either. Most often we Real Estate professionals hear about such treasures by word-of-mouth as we talk with our colleagues and neighbors. A sweet B&B may be available IF you know how to find one…and we do! . B&B4Sale@www.janeAnne.com
The notion of finding and owning the “perfect” B&B is intriguing. The mountain landscapes in the Greater Asheville, the coves with historic homes nestled in the greenery, the picturesque villages, and of course, the Biltmore Estate seem to call tourists to Western North Carolina. This is an area where tourists are welcomed. It is conducive to the B&B business.
If the B&B business truly catches your fancy, you may want to begin to lay the groundwork for ownership, just as I suspect the couple I described above had done. Plan overnights at local B&Bs and then extend your range, keeping in mind the locale and the real property values and availability to you. Perhaps the “right” B&B will cross your path.
To speed you on your way, I have prepared a brief overview including a bit of information on the history of contemporary B&Bs, and on how owning one might work for YOU... see the following posts.
*****By the way, if you have already done the investigation, and made the decision to invest your time, talent, energy and money in a B&B, please DO make contact with haste. I have personal experience in the B&B business, and stand ready to help you locate the perfect property in Western North Carolina for you. Just drop us a note at B&B4Sale@janeAnne.com
A BIT OF B&B HISTORY
The B&B business is not new on the scene. Travelers abroad have enjoyed stays at inviting B&Bs for a very long time. By the late 1960s, delight arising from remembered stays in European B&Bs made its way home with some of those travelers. They began to open their own versions of those establishments, and commenced to offer the familiar small lodging atmosphere in the U.S.A.
Now, thousands of B&Bs dot the highways and byways of America, and a maturing industry with a number of associations and support services, professional newsletters, travel publications, guidebooks, and vendors catering to small lodges also have appeared on the scene.
THE SPECIAL REWARDS OF BEING A B&B OWNER
The B&B business is not for everyone, but if YOU are attracted to it, the rewards can be immense. What owners of B& Bs tell me they like best about the business varies. Some say they enjoy meeting and conversing with their guests, some say the “very nice” income and the independence from a corporate regime is a plus for them. Others appreciate the business as a pleasant way of life. Every now and then, restoring an historic building motivates the potential B&B owners, and we do have wonderful old historic buildings in the Greater Asheville area just waiting for your loving touch.
There is a consensus that great satisfaction arises from “growing” and creating a valuable investment. Success does have something to do with the way one approaches the business. In this business, more than many perhaps, one’s style, the personality of the B&B itself, unique hospitality, standards of excellence, and creative marketing plans really count.
For a small town B&B for sale in the Greater Asheville area,
please check out this link:
http://www.janeanne.com/listings.asp
WHAT TYPE OF B&B IS FOR YOU?
Whether rural or city, there are different genres, or types of B&Bs.
Here in the Greater Asheville area, we have the full range, from large to small, and from rustic to contemporary. After spending some time with you, and understanding your choices, a Real Estate professional who specializes in the B&B market, as I do, can introduce you to a B&B that is likely to appeal to you.
Here are the different types of B&Bs we have in the Greater Asheville area.
The B&B Homestay. Many B&B proprietors start out in a small, residential business. This B&B Homestay is in a private, owner-occupied residence. The frequency and volume of visitors depends upon the primary use of the real property as your private residence. You could have from one to five bedrooms available, and expect additional income as a result. Some “Homestays” we know call themselves “ B & Fix Your Own Bs” but most do offer a full breakfast.
Please note, this business is not necessarily salable to a new owner.
A second type of B&B is the B&B/Inn. This is a commercially licensed business operated in a building that primarily provides overnight accommodations to the public even though you as the owner may live on the premises. In the Greater Asheville area, our surveys show that guest rooms for a B&B Inn range from four to 20 rooms averaging in nightly price ranges of from $150, per night to $320 or more. Breakfast is the only meal served and is included in the room charge. The business IS salable to a new owner, and is subject to all local, state, and federal regulations.
A third type of B&B business is the Country Inn. As the category title implies, this commercially licensed establishment is found at some distance from commercial areas. Visitors simply plan to drive to it as a destination. Such establishments may be known for their “romance factor” or for their superb cuisine.
The Country Inn not only offers overnight accommodations but a full-service restaurant that provides breakfast and dinner to overnight guests and/or the public. Still this can be a rather small facility with a minimum of four to a maximum of 20, although a number of Country Inns do have more than 20 guest rooms.
The business is salable to a new owner, and is subject to all local, state, and federal regulations.
Also recognized within the group of B&B accommodations are Small or Historic Hotels, establishments with twenty or more rooms that provide the “service and privacy of a hotel in the setting of an inn with some individual attention from a host.” Historic hotels typically are "at least fifty years old and associated with events or persons of significance in contributing to the broad patterns of history." Many of these small hotels have the advantage of distinctive characteristics of an architectural type, or a particular period in history. In order to be considered a true B&B, they must serve breakfast, of course!
ARE YOU GOING TO OPERATE YOUR B&B FOR PROFIT?
If you are attracted to the B&B business not only as an alternative lifestyle, but as a business venture you choose to operate for profit, you will need to take into consideration many variables. Needless to say, there are the financial facts of monthly overhead and debt payment, and the annual occupancy rate to take into account.Other variables will include number of rooms, seasonal highs and lows in the Greater Asheville area, start-up and improvement costs, advertising and PR expenses, your own income level, and your own profit goals.
A CAVEAT?: In a study by The Professional Association of International Innkeepers research showed that “most B&B inns needed at least five to six rooms to reach the break-even point before debt service and at least six to seven guest rooms to reach the break-even point after debt service.” The study also revealed “that average B&B owners devoted more than 74 hours a week to the daily running of a five to ten room inn.”
My own experience differs from this. I ran a 4 bedroom establishment, organized my staff from the college kids and grandparents in my area, worked less than I did when I owned an Executive Search Firm, and made a fine living in the process. My accountant warned me that a four bedroom B&B completely free of debt with no hourly wage taken out by me might generate a profit with 20 percent occupancy. But I did much better than this.
For more on B&Bs and B&Bs for sale in the Greater Asheville area please see:
http://www.janeanne.com/listings.asp
Here in the Greater Asheville area, we have the full range, from large to small, and from rustic to contemporary. After spending some time with you, and understanding your choices, a Real Estate professional who specializes in the B&B market, as I do, can introduce you to a B&B that is likely to appeal to you.
Here are the different types of B&Bs we have in the Greater Asheville area.
The B&B Homestay. Many B&B proprietors start out in a small, residential business. This B&B Homestay is in a private, owner-occupied residence. The frequency and volume of visitors depends upon the primary use of the real property as your private residence. You could have from one to five bedrooms available, and expect additional income as a result. Some “Homestays” we know call themselves “ B & Fix Your Own Bs” but most do offer a full breakfast.
Please note, this business is not necessarily salable to a new owner.
A second type of B&B is the B&B/Inn. This is a commercially licensed business operated in a building that primarily provides overnight accommodations to the public even though you as the owner may live on the premises. In the Greater Asheville area, our surveys show that guest rooms for a B&B Inn range from four to 20 rooms averaging in nightly price ranges of from $150, per night to $320 or more. Breakfast is the only meal served and is included in the room charge. The business IS salable to a new owner, and is subject to all local, state, and federal regulations.
A third type of B&B business is the Country Inn. As the category title implies, this commercially licensed establishment is found at some distance from commercial areas. Visitors simply plan to drive to it as a destination. Such establishments may be known for their “romance factor” or for their superb cuisine.
The Country Inn not only offers overnight accommodations but a full-service restaurant that provides breakfast and dinner to overnight guests and/or the public. Still this can be a rather small facility with a minimum of four to a maximum of 20, although a number of Country Inns do have more than 20 guest rooms.
The business is salable to a new owner, and is subject to all local, state, and federal regulations.
Also recognized within the group of B&B accommodations are Small or Historic Hotels, establishments with twenty or more rooms that provide the “service and privacy of a hotel in the setting of an inn with some individual attention from a host.” Historic hotels typically are "at least fifty years old and associated with events or persons of significance in contributing to the broad patterns of history." Many of these small hotels have the advantage of distinctive characteristics of an architectural type, or a particular period in history. In order to be considered a true B&B, they must serve breakfast, of course!
ARE YOU GOING TO OPERATE YOUR B&B FOR PROFIT?
If you are attracted to the B&B business not only as an alternative lifestyle, but as a business venture you choose to operate for profit, you will need to take into consideration many variables. Needless to say, there are the financial facts of monthly overhead and debt payment, and the annual occupancy rate to take into account.Other variables will include number of rooms, seasonal highs and lows in the Greater Asheville area, start-up and improvement costs, advertising and PR expenses, your own income level, and your own profit goals.
A CAVEAT?: In a study by The Professional Association of International Innkeepers research showed that “most B&B inns needed at least five to six rooms to reach the break-even point before debt service and at least six to seven guest rooms to reach the break-even point after debt service.” The study also revealed “that average B&B owners devoted more than 74 hours a week to the daily running of a five to ten room inn.”
My own experience differs from this. I ran a 4 bedroom establishment, organized my staff from the college kids and grandparents in my area, worked less than I did when I owned an Executive Search Firm, and made a fine living in the process. My accountant warned me that a four bedroom B&B completely free of debt with no hourly wage taken out by me might generate a profit with 20 percent occupancy. But I did much better than this.
For more on B&Bs and B&Bs for sale in the Greater Asheville area please see:
http://www.janeanne.com/listings.asp
THE B&B BUSINESS PLAN:
Your B&B Business Plan should include a comprehensive analysis what it takes to create and expand your business. Your ideas, intuitions and creative efforts deserve to be transformed into a business operation that can really work for you. You will need to decide what to do, how to do it, when to do it, and what resources you will need to make your dreams come true. You will need to scrutinize your financial requirements, what they will be and how they will be met. At this point, you will be able to take an objective look at the B&B I showed you, and identify areas of strength, weakness, and opportunity right away. You can also pinpoint needs and problems you might otherwise have overlooked.
If you are concerned about creating your B&B business plan, not to worry! I can refer you to financial consultants who are experts at helping you plan how best to achieve your business goals in the amazing B&B business. You need to make sure that the B&B is worth your time and money by taking carefully thought-out steps to achieve your goals for opening your business. It is wise to have your “team” together before you even open your doors. Keeping the lines of communication open with your attorney, accountant, insurance agent, banker, zoning board, and me your REALTOR just makes sense. My own experience tells me that your B&B business plan needs to be a fluid working document. Like any business, the B&B business is an on-going process. My own experience also tells me that so much of how your business evolves depends not only on mindful attention to the “art form” of the business, but how you develop your business plan, keep notes (even if they are on a paper napkin,) document facts you discover along the way, and your own lighthearted approach to the venture.
YOU NEED TO KNOW:
Be sure to check for the current B&B zoning law provisions for "Customary Home Occupations," as to outdoor sign restrictions; health, fire, and building code restrictions; and restrictions on the number of employees deemed necessary to protect residential neighborhoods from encroachment by business activities before you invest in a residential or historical property as a potential B&B.
Make sure you find out about deed restrictions or if there is a Homeowner’s Association with regulations that prevent homes in the area from usage as a B&B.
When you contact us, we can tell you about B&Bs on the market in the Asheville area and in mountains that surround our area. Connect at B&B4Sale@janeAnne.com
Remember, the B&B market is unique.
The B&B you desire may very well NOT be listed in our MLS system. B&B gems are not likely to be advertised on the Internet, either. Most often we Real Estate professionals hear about such treasures by word-of-mouth as we talk with our colleagues and neighbors.
A sweet B&B may be available IF you know how to find one…and we do!
CHECK OUT: http://www.janeanne.com/listings.asp for a darling small town B&B in the Greater Asheville area!
Please contact B&B4Sale@janeAnne.com to connect with a professional who not only has knowledge of our geographic region, but has personal experience in managing and owning a B&B.
If you are concerned about creating your B&B business plan, not to worry! I can refer you to financial consultants who are experts at helping you plan how best to achieve your business goals in the amazing B&B business. You need to make sure that the B&B is worth your time and money by taking carefully thought-out steps to achieve your goals for opening your business. It is wise to have your “team” together before you even open your doors. Keeping the lines of communication open with your attorney, accountant, insurance agent, banker, zoning board, and me your REALTOR just makes sense. My own experience tells me that your B&B business plan needs to be a fluid working document. Like any business, the B&B business is an on-going process. My own experience also tells me that so much of how your business evolves depends not only on mindful attention to the “art form” of the business, but how you develop your business plan, keep notes (even if they are on a paper napkin,) document facts you discover along the way, and your own lighthearted approach to the venture.
YOU NEED TO KNOW:
Be sure to check for the current B&B zoning law provisions for "Customary Home Occupations," as to outdoor sign restrictions; health, fire, and building code restrictions; and restrictions on the number of employees deemed necessary to protect residential neighborhoods from encroachment by business activities before you invest in a residential or historical property as a potential B&B.
Make sure you find out about deed restrictions or if there is a Homeowner’s Association with regulations that prevent homes in the area from usage as a B&B.
When you contact us, we can tell you about B&Bs on the market in the Asheville area and in mountains that surround our area. Connect at B&B4Sale@janeAnne.com
Remember, the B&B market is unique.
The B&B you desire may very well NOT be listed in our MLS system. B&B gems are not likely to be advertised on the Internet, either. Most often we Real Estate professionals hear about such treasures by word-of-mouth as we talk with our colleagues and neighbors.
A sweet B&B may be available IF you know how to find one…and we do!
CHECK OUT: http://www.janeanne.com/listings.asp for a darling small town B&B in the Greater Asheville area!
Please contact B&B4Sale@janeAnne.com to connect with a professional who not only has knowledge of our geographic region, but has personal experience in managing and owning a B&B.
