Bed & breakfast

This morning, I had a brief chat with my kids carer, Auntie S, who is also a dear family friend. She spoke of another family friend, Kak N (okay, a friend of my mother but I don’t know her that well). N has 3 bedrooms which she rents out on daily basis, after her kids are all grown up and has their own places (I suppose the kids will use the guest rooms when they go and stay at their parents). S had used the term homestay, but perhaps the term B&B (bed and breakfast) is more apt. In homestays, local experiences are usually part of the package, for example going to the sawah padi, or visit the industri desa etc. S remarked that N’s 3 rooms are usually full, and it’s a more profitable venture compared to renting out houses on monthly basis.

It’s quite an interesting WFH option, so I thought a bit about it on the way to work. First in terms of profitability. Let’s say each room can be rented out for RM90 per night (can’t exceed RM100 I think), and the rooms are full 70% of the time (I think the hospitality industry call this occupancy rate?). So, each month the gross income is about RM5670 (for 3 rooms). Let’s say, we minus out the cost of renovation and furnishing, which let’s say costed RM20,000 altogether to be depreciated over 5 years, that’s RM333 per month (interest-free). And the operational expenditure which includes electricity, water, laundry, breakfast (maybe) etc costs RM20 per room per night, which comes to RM1260 per month. Perhaps you want to hire a helper, to help with the cleaning, laundry etc which is about RM450 per month. So now, the net income per month is RM3627. Not bad, right? By the way, the RM20,000 capital expenditure is the estimate for the renovation (en-suite bathroom, separate walkway, stairs and main door maybe) and furnishings (furnitures, airconditioning unit, television, etc). To begin with, I think this venture is suitable for reasonably large homes (say 5-7 bedrooms).

How about viability? I think for somone who enjoys meeting new people, this venture would be pretty fun. For someone who enjoys more privacy, perhaps extra care should be taken during renovation to separate the guest rooms from the family area. Guests should be able to come and leave without disturbing the landlady (chewah, landlady, hehe). And the family should be able to leave and lock their home without inconveniencing the guests. Would there be demand for this kind of accommodation? Hmm perhaps, based on A’s remark on N’s venture. And depending on the location too, of course. I know I wouldn’t mind saving a few bucks (win-win situation) and stay at a comfortable, clean and homely room when visting someplace, though I imagine it’s more difficult to search and locate such services (marketing issue). Is the estimate of 70% occupancy rate reasonable? Hmm perhaps that’s a bit on the high side.