Assisted Living Numbers Make NO SENSE? Here's the Fix!
Aug 07, 2026
If you've started looking into assisted living, you've probably looked at the numbers and wondered if they even work. At first, it can seem like the staffing costs are too high and the profits are too low. I've had this question come up over and over, so let's break it down in a simple way. Want the full breakdown?
Watch the video below👇
The numbers only look confusing when you compare the wrong things
One of the biggest mistakes people make is comparing assisted living to other businesses without understanding how this model works. You see payroll, food, utilities, insurance, and other expenses, then assume there isn't enough money left over.
The truth is that successful assisted living owners are looking at the whole picture. They know exactly how many residents they need, what their monthly costs are, and how to build a business that stays profitable.
đź’ˇ When you understand the business model, the numbers start making much more sense.
Occupancy is what makes the business work
A home with empty rooms will almost always struggle. Every empty bed means income that could be helping cover your fixed expenses.
That's why experienced owners focus on keeping their homes full. As occupancy increases, many of your biggest expenses stay about the same while your monthly revenue grows.
âś… Focus on filling your available beds as quickly as possible.
When your home stays occupied, you'll have a much better chance of creating consistent monthly cash flow.
Staffing costs are important, but they are not the whole story
Many people stop researching assisted living because they see payroll costs. Yes, caregivers are one of your biggest expenses. But that doesn't mean the business cannot be profitable.
The key is building the right staffing plan for the number of residents you serve. As your home grows and your occupancy improves, your staffing becomes much more efficient because you're spreading those costs across more residents.
I've seen people get discouraged because they only looked at payroll instead of looking at the entire business model.
âś… Build your staffing around your resident count, not your fears.
Successful owners know their numbers before they open
The people who succeed don't guess. They run the numbers before signing a lease or buying a property.
That means understanding:
âś… Your expected monthly revenue
âś… Your fixed expenses
âś… Your staffing costs
âś… Your break-even point
When you know these numbers ahead of time, you can make smart decisions instead of hoping everything works out.
đź’ˇ A simple financial plan can save you from expensive mistakes later.
The goal is to build a business that serves people and creates freedom
One reason so many people are excited about assisted living is that it can create both impact and income. You're helping seniors receive quality care while building a business that can replace your paycheck over time.
That doesn't mean every home automatically makes $10,000 per month. Those results depend on your market, occupancy, expenses, and how well you manage the business.
The opportunity is real, but success comes from understanding the numbers and following a proven plan.
Wrap Up
If assisted living numbers have seemed confusing, you're not alone. Once you understand occupancy, staffing, expenses, and profitability together, the business becomes much easier to understand. Take the time to learn the financial side before you get started, and you'll be much more confident as you move forward.
If you need help creating a business plan for your assisted living business, check out the Free Business Plan Checklist.
And if you’re ready to figure out your next step, join me for the next Roadmap Challenge where I’ll walk you through how to get started.
Show full transcript 👇
Transcript
00:00:00
Have you been thinking about getting into assisted living and you start looking at the numbers and you're like, this doesn't make financial sense. Like, how are people actually profitable with this business? And you're confused about it, about the profitability and like the staffing costs and you know, I see so many comments that are just like the margins here don't make sense. And in this video, assisted living numbers, do they make sense? No, here's the fix. I'm going to help you
00:00:26
understand exactly how the numbers do make sense, how you can be profitable in this business and why so many people are interested in assisted living and why you're seeing people say, hey, you can make $10,000 per month with this, easy. Right? I want to help clarify that for you so that you know exactly what you're getting into as you're getting started. Hey friend, my name is Brandon Gustafson I help healthcare workers start their own assisted living businesses so they're not stuck trying to figure it
00:00:52
out and they know exactly what they should do next. I want to remind you really quick before we hop into this, get over to the website assistedlivinginvesting.net. I have a few resources over there that can help you out as you're trying to get started and with that, let's get into today's video. Why don't assisted living numbers make sense all the time? And I just want to help you kind of understand how you can fix this and help you understand. And this isn't me trying to help you, you know,
00:01:17
just like pound things, yeah, that round peg into a square hole or anything like this. This is me teaching you exactly how this works so you know what to expect as you're trying to move forward. Now, the biggest mistake that I see with beginners when they're doing their underwriting, underwriting by the way, is understanding the numbers, it's like running the projections, seeing how much money you think you could make. And if you need help with that, type in calculator down below, I've got a free
00:01:40
resource for you that I'll send over to you. I'll get you a link so just type in calculator, we'll get it over to you. But, the biggest mistake I see is one, you assume you are going to be 100% occupied all the time. And now, that mistake is going to make you think you're going to make a ton of money. But, the reality is that you will probably not always be 100% occupied. Even somebody that's been doing this since 2020, what I have found is we're probably mostly on average
00:02:10
between 80 and 90% occupied. So, you need to take that into consideration. That you will not always be 100% occupied. And if you underwrite your numbers at always being 100% occupied, and you're like, "Cool, we're going to make 10 $15,000 per month." When the reality is you're going to probably sit in closer to 80 than 90% occupancy. That's going to reduce your income by a chunk of money. So, you need to take that into consideration. And the second big thing that I see beginners miss when
00:02:38
they're doing their underwriting is they don't understand the big expenses. So, there are five big expenses. I call them the WIFED expenses. If you want to learn more about them, just type in WIFED, w i f e d, down below. I'll do a video for you specifically on them. But, the WIFED expenses stand for wages, insurance, food, your energy, which is like your bills, your utilities, and then your debt service, which is basically your lease payment, your mortgage payment, those things. Those
00:03:06
five expenses are going to make up about 80 to 90% of your total expenses. And wages being the biggest one is probably 50 to 80%. Like, it's a huge chunk of money is what your wages are going to be. So, if you can hone in on those things and understand exactly what that looks like, you're going to have a lot more success in seeing if this is actually going to be profitable or not. So, if you miss those five expenses, you're going to miss if this is going to be profitable. You're going to miss on
00:03:36
your numbers, and you're going to have these projections that are just off. Either you're not accounting for enough money, and so you're not making enough money, and you're losing money. Or, you're accounting for too much, and so your projections look off, and so So, like, "I'm not going to move forward with this because I'm not going to make any money on it. You need to hone in on those five expenses. We actually go through this in my roadmap challenge. So, if you're interested in that, type
00:04:00
in roadmap, but I take you through an exercise that shows you exactly what these five expenses are. We do a mini underwriting in that challenge, so you can see exactly can this be profitable using numbers that you want to see if it's going to work for you, okay? Type in roadmap, we'll get you the information down in the comments down below. Just go to roadmapchallenge.com. Now, what I want you to see here also is staffing model that wages piece, which is the biggest one. I'm going to walk
00:04:28
you through it a little bit, okay? And so you understand how that piece of it's going to work. Since it is the biggest one, I want to give that to you here in this video. So, the model here and what you're missing is you need to figure out the number of employees that you're going to need. And these employees could be your caregivers, your cooks, your housekeeping, your maintenance. We want to just look at those base employees. We're not looking at the administrator right now. We're just looking at the
00:04:53
hourly employees, okay? Let's say that in a typical home, you're going to need to have one staff member per shift. All right, so we need to figure out how many shifts that we have. So, we know let's say we're working 8-hour shifts. We've got three 8-hour shifts in a day. We're going to take those three per day. We're going to multiply that by seven cuz there's seven days in a week, okay? So, that's 21 total shifts that we have. If a normal worker can work five shifts,
00:05:18
five 8-hour shifts, that's 40 hours a week, then we would need to take 21 divided by five. So, we need a little bit more than four full-time employees, four and a half, five full-time employees should get us what we need, okay? So, now we know how many employees we need to cover the floor, to cover all the work that we're doing, the caregiving that we're providing to our residents. Okay, simplified version of it. Hopefully, you're following me. Now, we're going to take that. We're
00:05:43
going to figure out what's our hourly rate. So, what I would suggest that you do to figure this out if you don't already know it, go like on a job a board like indeed.com. Go look for local caregiving jobs at assisted living. You're going to find them. Like this is the best job board, by the way. If you're going to find and hire people using Indeed, it's a great tool to use for them for your caregiving staff, okay? So, you're going to look on there, you're going to see I'll say it's $20 an
00:06:08
hour is what you're going to pay them, okay? So, if I have one staff member that works 40 hours a week and I'm paying them $20 an hour, that's $800 per week that I'm paying that person. I'm going to multiply that by four cuz that's how many weeks there are in a month, right? So, 800 * 4 that's $3,200 and I needed five employees. That 3,200 * 5 is about $16,000, okay? So, that's going to give me an idea of how much money I'm going to pay my workers. And then I'm going to need to add my
00:06:38
administrator on top of it. Let's say the administrator makes $60,000 a year. That means they make about $5,000 per month. So, that's 16,000 for my normal staff plus the 5,000 to have my administrator. That's $21,000 per month in my wages. That's what I'm going to pay them. And then there's going to be some taxes and fees and other things on top of that that I've got to pay. So, let's just budget in that I've got to pay, you know, $24,000 per month for my staff. That That's my wages one. That's
00:07:03
how you figure out what your wages are. You take number of employees that I need, figure out that, multiply that by the amount of hours, the the rate that I'm going to pay them, and then I add in my administrator. When I do that, I have a pretty holistic view of what it's going to cost me from a wage standpoint to hire my people, okay? That's the big one. You hone that one in, you're probably going to be fine. You can probably figure out the rest of the other big five, the wife expenses.
00:07:26
They're pretty easy after you figure out that staffing one. Now, let's talk about revenue because this is the other piece that a lot of people get wrong when it comes to, you know, they're trying to figure things out from a money perspective. Does assisted living make sense? I don't know. Like it just feels a little bit off to me. And part of that is you don't understand how the revenue works. So, there are two big factors, I call them levers, you know, you can pull them, that that you
00:07:50
get to have. One is the number of residents that you have in your facility. And the second one is the amount that you're charging them per month to be in your facility. These are your two big levers. Okay, so if I have more residents, I can pull this this resident lever down more and more and more. If I have five residents, and that's what I'm capped at, you know, I can only have five residents, then I can only pull the lever down to you know, like right here. But if I have 20 residents, boom, I can
00:08:19
pull it down even further. The other piece of that is the amount that people are paying you per month. And so, if if I'm starting out at $3,000 per month, I can pull it here, but if I'm getting down to $10,000 per month, I'm down here. Now, if I do five residents at $3,000 per month, that's $15,000 per month in income. And if I know that my wages were at $23,000 per month, this isn't going to make sense financially, right? Doesn't make sense at all. If I have five residents and I'm
00:08:47
getting $5,000 per month, that's $25,000 there, but I still have to do all my other expenses. Probably not going to make sense. If I do 10 residents at $3,000 per month, now I've got $30,000 in income, right? But I've got to still pay about $23,000 in wages per month. I'm probably not making that much money, if any at all. But if I have let's say I've got 10 residents and they're paying me $5,000 per month, I've got $50,000 in income coming in. Okay, I hope you're following me. Like I'm
00:09:20
throwing numbers around. I got 10 residents, $5,000 per month. 10 * 5,000 is $50,000 in income. My expenses, especially my wages, probably isn't going to change all that much, whether I have five residents or 10 residents. Probably going to be about the same. Now, $50,000 per month in income minus $23,000 in wages, which is 50 to 70% of of all of my expenses, now I'm probably making some money, right? So, this is where you can see, "Hey, can I make some money? What if I have 20 residents and
00:09:54
I'm charging them 10,000 cuz I have a really nice high-end facility. That's $200,000 in income coming in. So, you have to understand these two levers right here. When you understand those two levers, you can understand, "Oh, I can pull both of these levers. I can pull one of them." And all of [snorts] a sudden, I get more money coming in. So, that's what you need to understand is when you're looking at serving a population, you need to identify who you're going to serve and then identify
00:10:22
how much you want to pay. And if you have a misalignment there, like you want to serve a Medicaid population and you want to charge $10,000 per month, you're probably not going to be able to do that. But, if you uh want to serve a private pay uh population and you have really high-end amenities and you want to charge $10,000 a month, that's probably fine. Now, if you want to serve a Medicaid population, which I do, I think Medicaid is the best-kept secret in assisted living. If you want to learn
00:10:46
more about Medicaid, just type in Medicaid down below. Do a video on that for you. It'll help you understand Medicaid a little bit more. But, if you want to serve a Medicaid population, you're probably somewhere between four and $7,000 per month. I had I'd done a video and if you want to learn more about this, type in 12 down below. But, I've done a video where I show how you can make $12,000 per month in a single room with Medicaid. Pretty cool, right? So, you can do that. It's possible, I promise. Type in 12 if
00:11:17
you want to learn more. Okay. Now, if that's something that you're interested in, you need to understand Medicaid versus private pay and how those things work and figure out which of those populations you want to serve. I'm not going to be mad at you for either one, but you can be very successful with whichever path you decide to go down. And And it's up to you, you get to choose. But, often times, in the beginning, as you're trying to figure out all these things out, especially if you've typed in
00:11:41
calculator down below, which if you haven't already, type it in so I can get you the underwriting calculator, the some of the big reasons why your early numbers are off, and it doesn't make sense to you, is you don't understand how your revenue works and how your expenses work. You need to hone in on your underwriting. And really, it's not that hard. It's a very simple math problem. It is revenue minus expenses equals profit. That is how money works. Like, I'm I'm taking
00:12:12
my MBA and everything that you know, I spent thousands of dollars to go to a class that's on finance and accounting and things like that. Um the simplified version of this is revenue minus expenses equals profit. Okay? That's what you got to figure out. I actually help you build all of that out in a way that a lender is going to look at and be like, "Oh my gosh. Yes, this makes sense. Let's give you a million dollars." I help you do that in my foundation builder program. I help
00:12:38
you build all of those things. I help you really like in the roadmap challenge, we go through the conceptual process of underwriting and how it works, and we work through your example. In the foundation builder, you're like doing the thing that you can give to a lender, and they will be like, "Yes, here's a million dollars." So, if you want to learn more about that, type in foundation down below. I'll get you a link to the foundation builder program, because that's where so many people get
00:13:02
stuck. Is they don't understand the numbers. They don't have a way to gut check it. They don't have a way to look at the wiped expenses and be like, "Uh is this right? Like, giving it to other people to look at and be like, is this make sense? Am I off? Well, tell me like, what am I missing here? Does my revenue number look right?" Like, that's the type of thing that we do in the foundation builder program, so you can be like, "Okay, cool. I actually could make 20, 30,
00:13:26
40,000 dollars a month in this business because now I have a lot of confidence in the type of business that I'm setting up. And those things are entirely possible, but you have to do it the right way so that you can get the funding, so you can get the business, so that you can start generating that income. And it all starts with building your foundation first. So, if you're interested in that, type in foundation. We'll I'll get you the link to it. Would love to have you in the program to help
00:13:49
you out as you're trying to just figure out how to get started and those foundational things you need to do first before you do anything else cuz it's going to lead to finding the right property, getting the funding, figuring out the licensing. It's going to take care of all of those things when you build your foundation first. All right, we talked about a ton today to help you out as you're trying to figure out, you know, does this actually make sense and what the fix is for this?
00:14:11
And really it comes down to understanding. Understanding the numbers and how they work and how to really implement that. We focused a lot on wages cuz it's the biggest expense and we focused a lot on your income because that's the way that you're going to put money into the business so you can get this. And once you have figured those things out, you're going to be so much more successful. If you found this video helpful, make sure you like it and subscribe. Ring the bell as well so you
00:14:34
get notified. And it helps other people like you find this content so that they can get unstuck because there's so many people that are in need of assisted living. There's not enough beds. And there's so many more people coming that need assisted living. There's a shortage. And we need people like you that are passionate about this, that know they can do it better than anybody else to get into this business in a way that we can serve those people back and and help them out. So, if that's you, I would love to help you
00:15:05
out. Are you curious about assisted living, but you're not sure how to get it started? At Assisted Living Investing, I help health care workers learn how to start their own assisted living business without feeling stuck and overwhelmed and knowing exactly what they should do next. If that's you, type in foundation below. Would love to help you out and help you start moving forward. And remember, it doesn't take a lot. Just a little bit. Just keep going step by step by step and I promise you, if you do and
00:15:31
you are consistent and persistent, you are going to be successful. Thanks for watching and have a great day. >> [music]
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