Lynette, well you certainly have chosen the right place to retire, in my opinion, Sri Lanka is really a paradise in this crazy world!
I would advise you to register a company with the Board Of Investment so that you are protected, and can easily get a resident visa ($300 total per year for all of that), and then buy your land and build your guest house, only $15 per square foot construction cost, and land is basically very cheap, think about $15,000 to $30,000 for a lovely plot in one of the following places, where you can easily get customers:
Nuwara Eliya
Ella
Unawatuna
Hikkaduwa
Negombo
Dambulla-Sigiriya-Polonnaruwa-Anuradhapura
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Contact me if you require more information on any of the above...
Regards, Sam.