Starting a Bed & Breakfast

Starting a bed and breakfast: what about your mortgage?

Starting a B&B: mortgage

Do you have to report your bed and breakfast plans to your bank?

You would like to start a bed and breakfast in your house. What does this mean for your mortgage? Do you need to report your B&B-plans with your bank? The terms can be different with every mortgage company. Therefore, check your mortgage and if needed, visit your bank.

Why report it to the bank?
The bank has lent you the money to buy the house. If you don’t pay your mortgage, the bank is allowed to sell your house through, for example, a public auction. So actually, the bank is the owner of your house. That is why you have to warn your bank when you do something to the house that could form a risk for the bank. So how about when you want to start a bed & breakfast in your house?

Better safe than sorry
When offering bed & breakfast you don’t rent out your house. Your guests don’t have tenants’ rights and cannot appeal to these rights in a court. Therefore, do you still need to report your B&B at the bank? The terms can be different with every mortgage company. Our advice: It’s better to be safe than sorry, so check your mortgage. Ask your bank for permission if you think this is necessary.

Free information about starting a B&B periodically publishes a free B&B start-up newsletter with information about running a B&B, that is interesting for start-ups too. If you’re interested, you can sign up for the B&B start-up newsletter. Also keep visiting this blog for more tips from practice.

About the author

Janneke Scheepers

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