After experiencing a guesthouse whether on holiday or business, many people entertain the idea that such a venture would be a dream lifestyle. Working from home, in luxurious surroundings of your own creation and meeting lots of interesting, often international people. You are thanked for your warm hospitality and excellent catering and you own a thriving business that you intend to sell for a handsome profit someday, right? Well, not entirely; having your own guesthouse is truly a labour of love.

The last decade has seen a proliferation of guesthouses mushrooming up all around the country and, according to RE/MAX Living Broker Owner, Gerlinde Moser, there are quite a few for sale at any one time.

"Guest house owners often do not want to make public the fact that their business is on the market as it may have a negative impact on business. Interested buyers therefore need to approach a reputable agent with a finger on the pulse of the market," states Moser

There is also a common perception that the guesthouse market is saturated.

"The White River area is a current hotspot for guesthouses, many of them owned by ex-Johannesburg city dwellers that have chosen a quieter life," says RE/MAX Active Broker Owner, Greg Gulle.

Whilst Knysna is bursting with new guesthouses, Plettenberg Bay’s RE/MAX Prime Properties Broker Owner, Cheryl Anley says that there are mostly self-catering options in their local market.

Big capital investment
"Opening a guest house is quite an investment and unless you are in it for the long-haul it is not necessarily a business you can make a huge profit on. The value of the property remains the greatest asset. Measuring the value of the guesthouse as a business is much harder to do," warns Anley.

RE/MAX of Southern Africa Regional Director, Bruce Swain, believes that owning a guesthouse should be a passion: "It is hard work to ensure that people are always comfortable and happy and often there are personal sacrifices around time and space."

Start your own or buy existing?
Buying a home as a guesthouse is best done with most of the cash upfront, as banks are often reluctant to mortgage a new business with no proven profitability. If you are not in a position of liquidity, it might be best to buy an existing guesthouse, and get an accountant to prepare a financial model for the business.

If you are intending to convert a property into a guesthouse, make sure you do a thorough investigation of the market and area. There are huge costs involved in starting up a guesthouse from linen and cutlery to ensuring that there is adequate parking and, sometimes, accommodation for your staff too. You also need to comply with the local municipal licensing requirements.

Owning a guesthouse can be an exceptionally rewarding and interesting career choice but you need to go into it for the right reasons and choose the right property in terms of position and price. Provided you make the right choices your guesthouse dream can become a reality and have you sleeping soundly at night — well, until it's time to get up and make everyone breakfast again!