Is it profitable to build a cottage and rent it out? A real business plan from the owner of an agricultural estate
In Europe, recreation in the countryside has long been popular. People come to enjoy the beauty of the surrounding nature, to live in silence and taste the local cuisine, traditional entertainment.
Demand creates supply - and this is how a whole sector of agricultural and ecological tourism emerged. It is widely represented by private commercial initiatives: agro-estates, ethnographic complexes and museums, establishments with authentic cuisine of the local region, walking routes and routes for cyclists with a developed network of rental and support, fishing and excursion farms, etc.
The Reconomica magazine became interested in the story about the agriturismo - how the idea of its creation came about and how it was implemented, as well as what income it brings to the owners. One of the entrepreneurs shared the details of the business.
What is an agriturismo and how did I get involved
Small-format hotels with a minimum required set of tourist amenities located in rural areas are called agro-estates.
An important condition for a good financial status of an agricultural estate is its location on a plot of land specially and legally allocated by local authorities. Lists of areas subject to participation in such a program are quite stable and change only in the direction of expansion.
In most countries, this type of business enjoys government support - tax incentives and subsidies. This is due to the need to develop economic activity and create jobs in the most depressed rural regions.
After setting a goal and assessing opportunities, make a decision
I opened my village hotel with my family in Lithuania at the end of 2021. At the time of the opening of the agro-estates, we were not able to take advantage of most of the existing financial preferences, since we were not citizens of this country and did not even have a residence permit in the Republic of Lithuania.
Getting the latter was the goal of starting a business. The attractive point was the large number of available offers in the housing market in rural areas. This makes it possible to choose an option that is feasible and suitable for you financially, since the cost of repairing and equipping the farm with everything you need can be significant.
Agritourism is gaining popularity among those who want to escape from the bustle of the city. It is not difficult to organize a business in this area, especially for rural residents and farmers. And how to do this is described below.
Relevance of this business
The relevance of agritourism is that with the technological progress and growth of cities, some residents want to get closer to nature and take a break from the bustle of the city. This type of recreation is only gaining popularity in Russia, but has long existed in the Czech Republic, Hungary and other countries.
Target audience includes:
As you can see, the target audience is very diverse and affects a large segment of the population, or rather, anyone can become your client.
In addition, a villager who has a plot of land or his own large house can open his own business in this area. This niche is also relevant for those who own a farm, on the basis of which agritourism can be promoted.
Stages of organization
The main stages of starting a business:
Client search, advertising
Despite the fact that this item is in the last place in the list of stages, it makes sense to start looking for clients while equipping the hotel. This will help avoid “idle time” when everything is ready and there are no visitors. In addition, by the number of responses to advertising, you can determine the number of people who want to visit such places.
I will tell you about my experience of opening an agricultural estate from scratch, receiving a subsidy from the state and opening an individual entrepreneur.
Subsidy and IE
To receive a subsidy and open an individual entrepreneur, I had to quit my job and register with the Employment Center of the Dokshitsy District. At first, I was offered employment options, I refused them 4 times, and only then they gave me a chance to become an individual entrepreneur.
Two months later I was invited to Vitebsk for training courses for entrepreneurs. There, for two weeks, we were taught the basics of business, after which there was an exam to defend our business plan. Mine was called “Agroecotourism of the Dokshitsy region”.
Then I opened a personal account at the local branch of the bank and brought the statement from it to the employment department. A temporary commission meets there, which decides whether to give a subsidy or not.
It was like this for me: I came with my business plan, where I indicated that I have a house and how I am going to use it during the year (how to make a sensible business plan, taught in courses) , a commission of three people asked me tricky questions: why do I need a subsidy, how lazy I am, whether I can achieve the results set for a year.
A week later, 2100 rubles (about $ 1,000) appeared on my personal account. A little later, I purchased a book of accounting checks and legalized it in the tax office. I pay one base amount to the treasury every year.
And now the first stage is completed, you can proceed to the arrangement of the agricultural estate.
Household and household investments
I bought a house in Dokshitsky district back in 2021, for a year it just stood there, biding its time. The main building is 110 sq. required floor replacement and cosmetic repairs. For this, a team of builders from Novopolotsk was called. All work was carried out under a contract with the provision of all checks to local governments. The house has 4 rooms, stove heating (2 stoves) plus an electric boiler.
In 4 days the craftsmen painted the roof, walls in the house, window openings and sheds. It all took 3 buckets of paint. Inside the rooms, he did not change anything, proceeding from the Decree No. 372 "On measures for the development of Agro ecotourism in the Republic of Belarus", according to which the reception of guests for more than 10 beds is taxed.
To build a cottage near Minsk and rent it out for daily rent - such a business plan may well mature in the head of a Belarusian. With an average rental price of 400-600 rubles per day, everything looks beautiful and profitable. But is it really so? REALTY. UT. Y visited one of the country estates on the banks of the Dubrovno reservoir to see if it was worth the candle.
How did it all start?
- When I started building a house for my family in 2021, I didn't think that soon it would become a part of the business, - says Dmitry, owner of the Dobra Khata estate. - Here is an ideal place for suburban housing - quiet, plot of 35 acres, near a lake, 20 kilometers to Minsk. Since I am a builder, engineer and designer all rolled into one, the construction process took only two years. I did a lot of work myself, which helped to save a lot.
But when Dmitry and his family lived in this house for a couple of years, he had an idea to try to rent out the cottage.
- In 2021, the goal was to rent the house no more than four times a month, so as not to “kill” him, and the rental income was enough to cover all maintenance costs. But then I got carried away and it became a business.
It all started beautifully: there was a great demand and Dmitry's cottage was in demand. Almost everything that was earned, minus expenses, he invested in infrastructure development. Thus, the attractiveness of the estate for visitors increased.
There was no winter as such this year, so it is used constantly. Dmitry says this is the first year that the pool has not froze.
Maintaining an outdoor pool is not at all a cheap pleasure: in order to maintain a water temperature of +21 ° C in it, you have to pay 600-800 rubles for gas. In summer, heating costs ten times less.
To keep the pool water cool quickly, the surface is covered with a special bubble coating. Dmitry says that such a solution is several times cheaper than installing a special pavilion over the entire pool. The owner estimates the investment in the construction of the pool at $ 30,000. But the high cost justifies itself - it has been serving for 8 years and will last so much before overhaul.
How to surprise guests?
It is difficult to surprise a Russian tourist, because many residents of the country managed to visit different resorts of the vast state. Therefore, sea adventures and recreation at ski resorts have long ceased to make the hearts of some of our fellow citizens beat faster. This kind of rest is being replaced by rural tourism - a unique way of rest, which includes unity with nature, exciting travel and an extraordinary approach to each tourist. This know-how requires a significant investment, but it is a very profitable business area. And while people still feel the excitement and desire to spend a vacation in the countryside, one should not miss this chance and earn a lot of money from a startup. This article presents a business plan for rural tourism with all the features of the industry and a step-by-step implementation of the project.
Recently, the prospects for rural tourism are growing. Today this niche occupies up to 20% of the travel market in the world. However, the situation with agritourism in Russia looks somewhat different. Its share in the tourism sector barely reaches 1%. Although the potential base for market growth and the vast territory of the Russian Federation, which can serve as a support for rural business, make possible the active development of ecotourism in our state.
The most promising regions for the development of agritourism on Russian territory are the Altai, Kamchatka and Khabarovsk Territories, as well as the Republic of Karelia and Kabardino-Balkaria. However, their potential is not limited.
Despite the country's abundant natural resources, Russians rarely visit national parks due to poorly developed ecotourism infrastructure and lack of funding.
The total annual income from agritourism in Russia is $ 12,000,000, which is a thousand times less than the income from ecotourism in America.
Nowadays there is a tendency in the development of rural tourism not only at the entrepreneurial, but also at the federal level. After all, the world community considers the Russian Federation as one of the promising states for the development of agritourism in connection with the rich nature and large natural resources in this territory.
The following advantages of rural tourism development can be noted:
- Creation of jobs for the rural population.
- Increased investment for the benefit of nature.
- Opportunity to acquire skills in tourism and nature conservation for the rural population.
- Production of ecological products.
- Craft development.
To implement all the above-described prospects, it is necessary to involve qualified specialists in this industry in the work process, to develop a non-standard and demanded list of services provided for tourists. In addition, a flexible pricing policy is needed to attract visitors from different walks of life.
First of all, the implementation of a business plan requires the official registration of a startup. Therefore, the entrepreneur faces the question: is it really necessary to choose the organizational and legal form of activity?
You can do without registration of an individual entrepreneur only in the following cases: