Assisted Living: The Hidden Profits & Horrors

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Thinking about investing in assisted living? You’ve probably heard stories about making $10,000+ a month in cash flow. Sounds amazing, right? But what’s really going on behind the scenes? This blog breaks down the real profits—and the hidden challenges—so you can see what’s really possible.

Let’s dive in! 🚀

Check out this video, too:

Why Understanding ROI and Cash Flow Matters

Before you jump in, it’s key to know how to measure success.

ROI (Return on Investment) tells you how much profit you’re making compared to your total investment.
Net Operating Income (NOI) is your income after expenses but before loan payments.
Cash flow is what you actually have left after paying everything—including your mortgage.

Cash flow is what most assisted living investors care about most, because it’s the money that goes into your pocket each month.

Big Expenses That Can Make or Break Your Business

To know what’s realistic, you have to understand where your money’s going. Here are the five biggest expenses you’ll face:

1. Payroll and Wages

Staff costs are the largest expense. Expect to pay about $19/hour+ for staff. Usually, you’ll have 1.5 full-time staff per shift plus an administrator making around $50,000-$80,000/year. All told, payroll could cost you $18,000-$30,000 per month — plus an additional amount (about 10-15%) more for payroll taxes.

2. Debt Service

If you bought a property for $650,000 with a 25-year loan at 10% interest, your monthly mortgage will be around $5,900.

3. Food Costs

Feeding residents typically costs about $10 per resident per day. That might seem low, but seniors usually eat less, and buying in bulk can help keep costs down. Here’s a quick look at some potential food costs by facility size:

6-bed: $1,800/month
10-bed: $3,000/month
16-bed: $4,800/month

4. Insurance

You’ll need property, liability, and workers’ comp insurance, costing about $2,000/month+ on average.

5. Utilities

Internet, power, gas, waste, and other utilities add up to roughly $1,000/month+.

Miscellaneous

Other things like activities, decorations, supplies, laundry, and office items will cost around 20% of your main expenses — about $5,700/month+.

What Does Profit Look Like for Different Facility Sizes?

Here’s a snapshot of what your monthly income and expenses might look like:

Six-Bed Facility

Income (at $4,500 per resident): $27,000
Expenses: $42,472
Result: Losing about $15,472/month

Margins are tight for small facilities. It can work, but you need to know your numbers really well.

Ten-Bed Facility

Income (at $4,500 per resident): $45,000
Expenses: $43,912
Result: Profit of about $1,100/month

Not huge profits here, but you’re in the black.

If you raise your monthly rate to $6,000 per resident, income jumps to $60,000, and your profit can grow to $16,000/month. Big difference! So knowing your market and pricing right matters a lot.

Sixteen-Bed Facility

Income (at $4,500 per resident): $72,000
Expenses: $46,072
Result: Profit of about $25,928/month

This is where those stories of $10,000+ monthly cash flow become real. But remember, it depends on occupancy, expenses, and your rates.

The Reality Check You Need

Small facilities have very tight margins, and big facilities have bigger margins—but also more complexity.

You can’t just assume you’ll hit these numbers. Every deal is unique based on location, financing, staffing, and your management skills.

Understanding your expenses and income before jumping in is key to avoiding costly mistakes.

How to Start Right

Want to know if assisted living is a good investment for you? Here’s what to do:

✅ Download the free underwriting calculator to plug in your own numbers.
✅ Aim for realistic occupancy — 80-90%, not 100%.
✅ Figure out who you want to serve and what your market can pay.

Next Steps: Take Action Today!

🚀 Ready to start your assisted living business?
✅ Step 1: Download the free Business Plan Checklist at AssistedLivingInvesting.net to build your solid foundation.
✅ Step 2: Apply for the Assisted Living Investing Mastermind for expert coaching and guidance.
✅ Step 3: Use your numbers, take action, and build your business step by step.

Got questions? Drop them in the comments below! ⬇️

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