Big Box vs. Residential: Choosing the Right Assisted Living
Mar 04, 2025
When it comes to assisted living, you have two main options: big-box facilities and residential care homes. Both provide essential care for seniors, but they offer very different experiences—for both residents and business owners.
If you’re thinking about starting an assisted living business or looking for the best care option for a loved one, it’s important to understand these differences. Let’s break it down!
Check out the video, too:
What Are Big-Box Assisted Living Facilities?
Big-box assisted living facilities are large, commercial-style buildings, often resembling hotels or apartment complexes. They typically house 50 to 100+ residents and offer a more structured, community-style environment.
Pros of Big-Box Assisted Living
๐ข Larger Community – Residents have more opportunities for socialization.
๐ More Amenities – Services like dining halls, gyms, and activity centers.
๐ฉบ Medical Support – Some have on-site nursing staff for higher levels of care.
๐ฐ Higher Profit Potential – Serving more residents can lead to bigger margins.
Cons of Big-Box Assisted Living
๐ Less Personalized Care – Staff-to-resident ratios may be higher, leading to less one-on-one attention.
๐ Turnover & Staff Challenges – Larger facilities often struggle with caregiver retention.
โ๏ธ More Institutional Feel – Some residents may feel like they’re in a hospital rather than a home.
Big-box facilities require significant investment, but they can also offer strong financial returns for investors looking to scale.
What Are Residential Assisted Living Homes?
Residential Assisted Living (RAL) homes are small, home-like settings, often in converted single-family homes. They typically house 6 to 16 residents and focus on a more intimate, family-style experience.
Pros of Residential Assisted Living
๐ก Home-Like Environment – Residents feel more comfortable in a familiar setting.
โค๏ธ Personalized Care – Lower resident-to-caregiver ratios mean more individualized attention.
๐ค Stronger Relationships – Owners, staff, and residents form close connections.
๐ ๏ธ Lower Startup Costs – It’s generally cheaper to convert a home than build a big-box facility.
Cons of Residential Assisted Living
๐ฅ Fewer Socialization Opportunities – Smaller communities may offer fewer activities and amenities.
โ๏ธ Tighter Profit Margins – Lower resident numbers mean lower revenue potential.
๐ Licensing & Zoning Challenges – Some cities have strict regulations for residential care homes.
For those who value personal impact over large-scale profits, RAL homes can be a rewarding business model that provides high-quality care in a family-like setting.
Which Model Is More Profitable?
๐ฐ Big-Box Facilities:
- Higher revenue due to a larger number of residents.
- More ability to offer Medicaid-funded care.
- Economies of scale help reduce operational costs.
๐ก Residential Assisted Living Homes:
- Lower overhead costs but also lower revenue potential.
- Higher caregiver costs per resident.
- Typically, higher volume of private pay residents, limiting funding options.
While big-box facilities often have higher profit margins, residential homes can still be profitable—especially for hands-on owners who provide exceptional care.
Which Model Is Right for You?
๐น Choose Big-Box Assisted Living If:
โ๏ธ You want to scale your business with higher profit potential.
โ๏ธ You’re comfortable with a larger investment and managing more staff.
โ๏ธ You’re open to Medicaid and government funding.
๐น Choose Residential Assisted Living If:
โ๏ธ You want to build a close-knit, family-style environment.
โ๏ธ You prefer lower startup costs and a more manageable business size.
โ๏ธ You enjoy one-on-one relationships with residents.
How to Get Started
No matter which model you choose, here’s how to start your assisted living business:
1๏ธโฃ Build a Solid Business Foundation – Research demand, competition, and pricing to create a strong business plan.
2๏ธโฃ Find the Right Property – Ensure zoning compliance and select a home that meets state requirements.
3๏ธโฃ Obtain the Funding – Use an underwriting calculator to assess financial feasibility and secure financing.
4๏ธโฃ Understand the Rules & Regulations – Work with local agencies to navigate licensing and compliance.
5๏ธโฃ Launch & Scale Your Business – Hire and train qualified staff to provide top-quality care.
Want step-by-step guidance? At Assisted Living Investing, we provide resources like:
โ
The Assisted Living Launchpad
โ
The Assisted Living Accelerator Course
โ
The Mastermind Program to help you launch successfully
Final Thoughts
Both big-box and residential assisted living models offer unique benefits and challenges. The right choice depends on your financial goals, passion for care, and business vision.
๐ Are you ready to start your assisted living business? Share your thoughts below!
Take the Next Step
To help you get started, download our Business Plan Checklist. This resource will guide you through the steps of building a solid business plan.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript ๐
Transcript
00:00:00
hey friend I'm Brandon Gustafson I help beginners like you launch their Assisted Living business in the next 12 months in today's video we're going to be getting into the difference between a big box assisted living facility and a residential assisted living home so if you're interested in that make sure you stick around for today's [Music] video hey friend welcome back to the channel before we get started want to remind you to get over to the website and get access to our free underwriting
00:00:28
calculator just go to the assisted living investing. net pop up and you can get access to that free resource going to help you underwrite and make sure you are making a sound um Financial investment for yourself now let's get into the topic of today's video What's the difference between a big box assisted living facility and a residential assisted living home you probably have heard those terms kind of bandied about a little bit and and you you just don't understand exactly what
00:00:54
the difference is so I really wanted to hone in on that in today's video let's start off by talking about what a big box assisted living facility is this is when people think about assisted living and you probably watching this video when you first started thinking about Assisted Living this is probably what you thought about it's kind of an apartment style building it's big it feels more clinical you might even think of it as like a nursing home a lot of nursing homes feel this way there they
00:01:23
just you know there's a lot of people in there and and there's you know 50 to 100 people there there's a lot of staff there's a lot of residents there's a lot going on there can be nice high-end ones but they feel like a hotel or an apartment and and they feel like you know just like you're another person you're another thing in the Cog and there's nothing bad with that and often times it's something that people that's where they have to stay or or maybe they
00:01:50
like that because they like the amount of people that are there and they just like the feel of it so I'm not saying anything bad against them it's just one of those things that you know it just feels different it feels not like a home it feels more just like you're you're in that apartment and just kind of living with a bunch of people you have roommates you know all those types of things it feels like that and so that that's one of the things that really differentiates a big box facility
00:02:16
against a residential assisted living home as just the amount of people and the style that that exists in inside of that type of a facility now as an investor what you're going to find there though is you're going to have higher margins because there's more people in there there's higher income higher expenses but you have higher margins as well because you get more economies of scale so as an investor it's actually frankly probably going to be more profitable if you want to go the route
00:02:43
of a big box facility it's going to be more costly to buy into it but because of the volume that you have inside of that business probably going to be a little bit more profitable for you so it's one of those things you know which which thing are you most passionate about we have somebody that's in my accelerator course right now that is looking to do a 50 bed Facility have somebody that is going to join The Mastermind that is doing two homes and this is like unique but they're kind of
00:03:09
connected and it's going to end up being 50 beds so it doesn't need to necessarily feel like an apartment building but it is something that you know you get some better economies of scale it's going to cost you more money but you're going to have some better margins on there so you know it's not a bad thing to want to do one of these that's something else that I want to tell you is a lot of you probably follow me and and people like Serge and the residential Assisted Living Academy um
00:03:35
and there's a bunch of places out there and we all talk about this residential Assisted Living World and there's so much more out there and when you brought in your horizons and start thinking about other possibilities uh it's going to help you out and what I try to do here at Assisted Living investing is create an atmosphere where yeah if you want that small residential home I can help you do that but if you want something that's big and something like that's one of those higher more volume
00:04:01
more residence in it more of a commercial style of a building I can help you do that too because the process it's going to follow something that's very similar to what I teach on a small home inside of my Mastermind program we talk a lot about those things so it it doesn't mean that this is you know I'm not saying that this is the worst decision ever I just want to make sure that you understand what the difference is between the two so you can make the best decision and because those margins
00:04:25
like I was talking about are are bigger you're probably going to be more profitable if you go the route of getting a big box assisted living facility the license type is going to be slightly different um the application process very similar like I was just saying in in my Mastermind program we kind of go through these five pillars one of them is obtaining the the facility license that's the fourth pillar and the the process there it's going to look very similar you need to fill out their application you need to
00:04:50
provide insurance information Bank information you've got to check some boxes do your policies and procedures very similar you're just kind of checking different boxes for which type of license you want to have for your facility so it's just something you want to be aware of but the the process for obtaining that license going to be very similar you're going to need a lot of the same paperwork and things as you go through that um only slight differences if you would like to learn a little bit
00:05:14
more about big box facilities type in big box down below so I can do some videos on that and kind of help you understand what that looks like what the process is going to be if you want to acquire one of those types of facilities what it's like to operate them so comment big box if you're interested in learning more about that now let's talk a little bit about residential assisted living homes and I I'm specifically saying this differently there's a big box assisted living facility which feels
00:05:39
more you know feels like an apartment feels like a commercial style building versus a residential assisted living home and it feels more home it sounds more like the home that you want it to be so let's get into those residential assisted living homes it is more intimate it feels more like family it feels more comfortable and you're able to cater a little more to the specific needs of residents and that's what people really like about this um there's like that boutique style of living that
00:06:09
you see when you get into this type of a home where it's just you know you can have the small Care Homes and I've got a video on this that's can you be profitable with a two or three bed care home um so go ahead and watch that video so you can have those small homes you can have residential homes that are 10 to 20 beds somewhere in there and they still feel more like home and still feel like the atmosphere here that you probably before you started watching videos from people like me you didn't
00:06:35
realize existed and that's why you are now passionate about the Assisted Living industry because you can see the potential and impact that you can have on people's lives and create something that you would want your parents or your grandparents to experience and that's a lot of what draws people to this idea of assisted living and why people are looking at getting into investing in Assisted Living because of these residential style homes now the margins like we were just talking about they're
00:07:03
going to be tighter it it it it may not be as profitable potentially going to be more difficult for you to operate because you're on a smaller scale and you don't have the volume of Staff or residents and and things like that and it can be a little bit more stressful if I'm being honest with you but it can also be extremely rewarding because of the the personal relationships that you are building with the residents and the staff that are inside of your home as you are trying to build things with them
00:07:30
and and help them out through their lives and and make progress and and live the lives that they would like to live especially as they get into their Golden Years uh that's something you want to to be aware of so of these two options which one is best I can't tell you what is going to be best for you um that's very much a personal decision what I will tell you is from an investment standpoint a big box assisted living facility is probably going to be better there's better margins there's more
00:07:57
profit in it it's just a more commercial style and it's not going away there's going to be a huge need for that and if you're interested like you're you're interested in doing one of those I would highly suggest getting into Medicaid so I'm going to link up a video up above that talks about Medicaid because you're going to be able to serve a great population there and understand who you can do and you can fill those beds up really quick um you can do that in a small assisted living home as well but
00:08:21
in a big facility it's a really good use to kind of help your cash mix get going so you can turn a profit and make sure your your beds are full now if you want to make more of an individualized impact and you want to have something that's more personal then going the route of a residential assisted living home is probably the best for you if you love the idea of having this kind of small intimate setting and you can work with people in in that setting and you're okay with not making as much money I I would go 100%
00:08:53
with this residential style of a home it is extremely rewarding I love going and visiting my homes and talking with my residents and getting to know them and their stories and things like that and I feel like if I owned one of those big box facilities I wouldn't be able to do that with all the residents I wouldn't be able to get that type of a feel um I would just the as much as harsh as it sounds they would feel more like numbers to me and in a small residential assisted living home they feel like
00:09:20
people and and that's what I love about it so which one's right for you that's up to you to decide I just want to kind of go through those two different scenarios so you have anide idea of what that looks like I hope that was helpful for you if you found it helpful make sure you like the video subscribe and ring the bell as well so you get notified when we put out content we do lives on Tuesdays and put out content on Thursdays we have our Facebook group that kind of gives you some guidance as
00:09:44
well and if you need some of those free resources you found an opportunity and you're like I want this big box or I want this residential get our free underwriting calculator just go to assisted livv investing. net pop up right for you you can get access to that and determine if it's a good fit for you or not so make sure you go and grab that free resource if you need some help building the business plan and and really diving deep in underwriting get our business planning guide um we'll
00:10:06
link that down below but that's going to help you it's kind of the base of everything that you need um it is Phase One of getting started it's market research it's underwriting it's building that business plan those things kind of fall into that phase now if you need some extra guidance you want some more help and you want some supporters you're going through this investment Journey check out our Mastermind program at Assisted Living investing. netmaster I love helping the people in The
00:10:31
Mastermind it's so rewarding to see the progress they're making and helping them achieve their dreams I I love it and if you are interested in and doing that check us out assisted living investing. netmaster and if you want a free strategy session to see if it's a good fit for you or not reach out to me at Assisted Living investing. net strategy does residential Assisted Living sound interesting to you but you don't know how to get started at Assisted Living investing. net we're here to help
00:10:54
beginners like you launch their Assisted Living business in the next 12 months so they can achieve that time and Financial Freedom that they're looking for and remember it doesn't take a lot just a little bit keep going step by step by step I promise you that if you do and you're consistent and persistent you're going to be successful thanks for watching and have a great day [Music]
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