How to Become a Landlord for an Assisted Living Facility

assisted living lease agreement assisted living real estate assisted living rental property how to rent to assisted living operator landlord assisted living residential assisted living landlord Jul 10, 2025

Want to rent your home to someone who runs an assisted living facility? You're in the right place.

Many landlords don’t know this is an option—but it is. In fact, it can be a great way to turn your home into a cash-flowing business without running the care side yourself.

I recently spoke with someone in our Facebook group who’s doing just that, and today I’m breaking down the conversation and giving you the exact steps to get started.

👇 Plus, I’ve got a free lease agreement template you can download below to help you start right!

Check out this video, too: 

Why This Matters

Becoming a landlord for a residential assisted living (RAL) home is a smart move if:

  • You want passive income

  • You don’t want to run a care business

  • You’re open to renting to someone who does

It’s also a great way to build wealth with real estate while helping your community.

Let’s walk through what you need to know.


🧠 Step 1: Know the Role

As a landlord, you own the house, but you’re not running the care business. You’re renting the property to someone else who will.

Here’s what that means:

  • You’re not hiring caregivers

  • You’re not dealing with licensing

  • You’re responsible for the lease and the property upkeep (just like a normal landlord)


🧑‍⚖️ Step 2: Talk to an Attorney

This part’s important. Assisted living leases are not your typical rental agreements.

💡 You need an attorney who:

  • Understands assisted living

  • Can draft or review your lease

  • Will help you protect your property

I recommend:

  • KKOS Lawyers (they helped create the free lease template)

  • Clint Coons – search him on YouTube; he has solid ALF experience


🕰️ Step 3: Go Long on the Lease

I don’t recommend one-year leases here. Why?

A short lease means:

  • The operator might leave before they get profitable

  • You may be stuck starting over quickly

  • It adds risk to your investment

✅ Instead, go with a 3–5 year lease or longer.

This gives:

  • The operator time to build their business

  • You stability as a landlord

  • Both of you peace of mind


💰 Step 4: Set a Fair Monthly Rent

Can you charge more than a normal renter? Yes. And you should.

Why?

  • They’re running a business from your house

  • There’s a little more wear and tear

  • There are higher risks and more traffic (visitors, staff, etc.)

📈 You don’t need to double the rent, but it’s fair to charge 50–60% more than market rate.

Just make sure the rent:

  • Is still reasonable for the operator

  • Allows you to cover your risk and expenses


🛡️ Step 5: Require Proper Insurance

You must protect yourself here.

Here’s what to ask for:

  • Liability insurance (aim for at least $1M)

  • Property or renter’s insurance

  • You listed as an “additionally insured” on the policy

📝 Pro tip: Put all insurance requirements into the lease.

Also talk with:

  • Your attorney

  • An insurance broker familiar with assisted living


🏘️ Step 6: Double-Check Zoning

Before signing anything, make sure the home is zoned for a residential care business.

Start by:

  • Calling your local planning or zoning office

  • Asking if a care home (typically 6 beds or less) is allowed at your address

  • Understanding any conditions or permits required

🚫 Don’t skip this step. Zoning issues can shut the whole thing down fast.


👥 Step 7: Vet the Operator

This is who will be running the care business in your house. Don’t skip due diligence.

Ask:

  • Do they have experience in assisted living?

  • Have they run a facility before?

  • Can they show proof of insurance and a business plan?

  • Are they licensed (or in the process)?

📌 Bonus tip: Join our Facebook group and connect with operators. Many landlords find trusted operators there!


Download the Free Lease Template

To make this easier, I’ve included a free residential assisted living lease agreement template for you.

It covers:

  • Lease terms

  • Insurance clauses

  • Operator responsibilities

  • And more!


Wrap-Up: Make the Jump into RAL Landlording

This isn’t your average rental. But if you do it right—with a good lease, strong tenant, and clear terms—it can be one of the best real estate plays out there.

Remember:

  • Talk to a lawyer

  • Charge fair rent

  • Protect yourself with insurance

  • Go long on lease length

  • Vet your operator

  • And check zoning before you sign


✅ Ready for Next Steps?

📥 Download the Free Business Plan Checklist to see how operators evaluate deals — great if you’re screening them!

🚀 Want support turning your property into a care home rental? Apply for the ALI Mastermind and connect with both operators and landlords building these deals.

 

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