So you want to
buy a B & B,
Apartment
House
or Hotel?
At the moment hardly a day passes
without us receiving a request from families wanting to make a new life
abroad
by running a B & B, hotel or pension. There seems to be a mass
exodus from the British Isles, Ireland and
other densely populated countries.
“We have houses, jobs and money – but no quality of
life” is the general theme.
May we, therefore, offer you some sound advice?
Generally, family businesses only come for sale for
three reasons . . .
-
Reason 1.
The owners are getting divorced.
That accounts for a high proportion that we get for sale.
-
Reason 2.
They are in a financial muddle.
-
Reason 3.
They want to retire and have no family to follow them. These are
usually the best ones but it happens quite infrequently.
You will not often find a small family pension for
sale which has been making wonderful profits year on year, and which is
in perfect order and run by the ideal couple who suddenly want to sell.
It just doesn’t happen.
We can usually ascertain the operating costs for you
– water charges, sewage charges, electricity, heating costs etc., but
you are going to have to say “OK. In my hands and with the
marketing that I will do, this business can gross xxx”. Make those
figures achievable.
Businesses on the north side of the
Alps and in popular ski areas are getting hard to find and it is worth
turning your attention to the businesses that we have in Carinthia or in
Styria and Burgenland or Niederösterreich – even though you may not be
familiar with these areas. Property there is generally cheaper
anyway. These are equally beautiful parts of Austria. We
currently have lots of large farmhouses and other attractive buildings
to renovate which are well worth thinking about. No, they are not
in ski resorts but they are in a 'different' Austria to that which you
might know. They are in "Thermenland" an area with many Thermal
Baths which attracted 7.5 million tourists last year and where high
season is 12 months of the year. It is better to have six bedrooms
occupied almost all the year round than 12 bedrooms with 40% occupancy
if you are lucky. The Danube valley attracts a great many visitors just
as the Rhine valley does so look at Lower Austria too.
See the Steiermark section of our website. Properties to renovate
start at about 50,000 Euros and we have contacts with architects and
builders who can arrange the renovation for you. It's a really
lovely area to live and work and makes much more sense than borrowing
large sums of money !
Also check out the businesses that we have on offer
in Niederösterreich. The local government there are offering renovation
grants for property insulation, installation of environmentally friendly
central heating systems such as wood pellet systems, replacement and
insulation of roofs and the replacement of old windows. These
costs can be funded with subsidised bank loans and lower deposits are
acceptable.
We have a very good relationship with the department
of the Austrian Government who's responsibility it is to attract outside
investors into Austria. They are echoing the government view and
anticipating that some 500 - 800 family Guest Houses will come up for
sale in the next few years. They will also assist with Austrian
residence issues for non EU citizens subject to their bringing a minimum
amount of working capital into the country in order to set up their
chosen business enterprise. We will give you all the details.
Some of these commercial sales will be due to the
fact that many owners have no-one to follow them in the business. Either
their children are too well educated and choose to follow other
professions - or maybe they have left home in order to live abroad.
Another factor is the price structure in the Austrian
hotel industry as a whole. In general, the four and five star hotels do
not charge enough in comparison to other countries. This means
that 3star, 2star and 1star hotels find themselves in a position where
they too have to scale back their room rates. Therefore, at the lower
end there is an invisible limit on the prices that B & B's and Apartment
Houses can charge their clients, otherwise they will opt for a hotel
with a higher star rating as the cost differential is negligible.
Prepare a realistic business plan.
Anyone can put figures on paper and prove almost anything, but do it
sensibly and realistically. Having agreed a mortgage with a
lender, keep to your budget and don’t get big ideas.
If you need to renovate, then do a couple of rooms first, and then a bit
more next year once you can see that the clients are happy and that your
bookings are increasing. We have seen clients who have torn up
their plans and renovated the whole place, put in saunas, bars and a
host of other things before they could afford it.
Don’t do it !
You have all seen the TV programme “No going back” –
well they do! We also get egg on our face and a bad name for
introducing bad business to the banks which makes it harder for us to
help our more sensible clients. We don’t need problems like that.
Quite a few buyers have found out after the first few years that it is
not as easy as it first looked. There are long hours to be worked
and competition is stiff. A noticeable number have subsequently
decided to sell up and return home and that is why we try very hard to
pass on our experience to our clients at the very outset. It is
not all about spending your days out skiing with your clients - however
nice they are!
Most people think that their business
will come from England
or their country of origin. Some of it might,
but most of it will come by car from Germany, Poland, Czech Republic,
Hungary, Croatia, Italy, Slovakia, and Slovenia and so on.
Thinking that they will only get ‘Brits’ or Irish families on
Ryanair who need picking up from the airport the
first thing they do is buy a mini-bus. Don’t do it ! You are
running a hotel and you can’t do it properly whilst you are running
people up and down to the airport. Maybe you can afford to do it
later. Anyway, you need a separate Konzession to run a taxi firm.
They speak German in Austria
and you will have to learn – and quickly. The Austrians speak with
a very strong dialect and it is difficult to understand them even if you
have a smattering of German to begin with. Start learning the
language right now.
Make the most of the agent who sells you the
property. Don’t approach vendors direct, or start negotiating
behind the agents’ back. You will need support from the agent in
matters such as electric connections, bank account opening, arranging
insurance, dealing with the local authority and so on. Most of
them will help you but not if you offend them.
It us usual when a business changes
hands for the local Bezirkshaupmannschaft to pay a visit and ensure that
everything is OK. They are not as tight on such matters as fire
regulations as they are in
some countries but they usually ask for something or
other to be done. Therefore, get the agent to speak to the
authorities and see if there is anything important that is outstanding.
Make sure too that there is nothing outstanding with the local
Gemeindeamt – unpaid sewer connection charges – that sort of thing.
The good news is that
Austria is a lovely country and most of our business
clients have done well. They have usually managed to fill the
struggling hotel with a whole new crop of happy clients with an active
approach to marketing – usually using the internet. We can also
help you with that as we do a lot of websites for our hotel clients and
are very experienced in that sector.
The best thing to do is to
meet us and our team
at our offices in Bad Ischl . These are are about 40 minutes east of
Salzburg by car. We can then talk everything through with you and
answer all your questions. Our sister company is a properly
registered estate agents in Austria
and trades as Delta Immobilien GmbH and you will find
their
details here.
Delta Immobilien GmbH
Kreuzplatz 15
A – 4820 Bad Ischl
www.deltaimmo.com
- this website is in German of course.
00 43 6132 26868
We are usually busy so please plan your visit in
advance with us so that we
can give you adequate time.
Things are different
in foreign countries.
The laws are different and you need good
advice to get it right. We strongly advise you not to do it on
your own.
Our contacts all
speak both languages and we are in a unique position to advise you.
We want you to succeed, and we will do our very best
to help.
Euroburo Ltd
