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 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 do that.

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 Esq – 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 potential for 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 20–60% 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 and your property are 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.

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!

Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.

▶️ Watch on YouTube

Show full transcript 👇

Transcript

00:00:04 - 00:01:03
hey friend it is Brandon Gustafson with Assisted Living investing excited to have you here with me on the channel today this is the third time I'm going live because I've been having issues with the channel today uh but wanted to get on here and and give you um just kind of an overview of what I wanted to talk to you about I had a conversation recently and um we're going to be talking a little bit about how to become a landlord for a residential Assisted Living facility I just wanted to share with you I do have a free lease template

00:00:34 - 00:01:33
that you can use we're going to link that down below here in the description so if you want to get that go ahead and click on the link and it will take you over to get access to that and kind of help you along your journey now let's get into what we wanted to talk about today again we're talking about how to become a landlord of a residential assisted living facility and I'm going to see this is a different okay cool um so my background if you don't know me and and don't know kind of what I what

00:01:03 - 00:02:08
my experience is or anything like that I own and operate two assisted living facilities I do that out of state I live in Utah one of the facilities is in Colorado and one of them is in Idaho and have been operating those since 2020 and I own both the real estate and I operate the business so I have a little bit of experience um with those facilities plus some other experience that I have with businesses that I've run that uh kind of give me a little bit of experience as far as being a landlord and helping people along that process so

00:01:36 - 00:02:33
uh kind of gives me gives you a little bit of an idea of what that that looks like and and why I have the experience there um now if you are watching this live I'd love if you could comment down below landlord or operator uh depending on where you're at are you a landlord comment landlord or if you are an operator comment operator uh I'd love to hear you know who are you and what are you watching uh for and uh let's see if we can kind of help people out along their investment Journey which is really

00:02:05 - 00:02:58
what I'm trying to do here with everything that that we have going on here at the channel um so I want to talk to you a little bit more about this recent conversation that I had so in the Facebook group Assisted Living investing if you're not a member please get in there and join I'd love to to chat with you and and help you through your investment Journey there but I had a a person reach out her name is Marlene um and she and I had a conversation yesterday it was it was great I want to thank Marlene for reaching out uh we had

00:02:31 - 00:03:30
had an excellent conversation she's a member of the Facebook group and she is a landlord and she is looking uh she actually had somebody approach her to become um to to run a facility to run a care home a three-bed care home out of her house and she's new to it and she had a few questions about you know how does this work and she had reached out specifically about the lease agreement um and what that looks like and again if you just get over to the website uh we'll have that link down below but you

00:03:01 - 00:04:01
can get that free lease template and kind of help you along your process but she wanted to to know what that would look like and and how to to go through that and as a landlord what are some things that she should be aware of and what she should know and there were a few things that I thought were really insightful and I wanted to come in and do a live for you to kind of help you through that process and help you understand exactly what it is that you know you might be wanting to look for as you get into this and and so I have a

00:03:31 - 00:04:39
few pieces of advice to help you through the process number one you need to talk to an attorney um I'm not an attorney um you need to go and find one uh and one that has some experience in Assisted Living I think is going to benefit you uh even more and so what that would look like um I I work with kkos lawyers um KK and they're great I love them the the least template that I have available for you um came from them great conversation with I love working with them another one that I'm aware of online is Clint

00:04:03 - 00:05:07
Coons c l n t Coons is C NS and you can find him on YouTube um he has some incredible videos about Assisted Living so he's worked in the space before he kind of knows what he's talking about um so those are two attorney offices that I would suggest that you maybe reach out to if you can't find one local to you and and just have a conversation and say hey I'm a landlord I'm looking to set up a lease for my um for my house and and have somebody operate a care home or residential assisted living facility inside of it and I need some

00:04:37 - 00:05:29
help setting up the lease can you give me some guidance and they're going to be able to help you out through that process now as far as the length of the lease this was another conversation that Marlene and I had that I thought was really interesting um so she is going to set hers up with a fiveyear lease which I think is great and we talked a little bit about how a one-year lease might actually be a little bit too short of a period of time when you're setting up a lease for somebody running an assisted

00:05:02 - 00:06:02
living facility and for you as a landlord that could give you some extra risk because uh you might get somebody in there and they operate it for a year and they might start to be getting to be to the point where they're profitable but they're not quite there yet and maybe they're having questions about how much work it's taking to run that facility and and they're just kind of iffy and they don't know if that's what they want to do um which could be the case now if you sign a one-year lease they

00:05:32 - 00:06:28
may you know decide ah you know I want to back out and I don't want to do it and so you would risk losing your tenants and then you have to start all over if you're a landlord whereas if you do a longer lease three five 10 years you've got that person that operator in in your facility uh for a longer period of time they're probably going to be a little bit more apt to to really dig in and and make sure that everything is successful and they're running that business in a way that's going to bring

00:06:00 - 00:07:03
more people in and help them through the process so um I I really like what she's doing with that fiveyear lease I think it's a great idea um and for the operator I think it gives you a lot of confidence as well because you know that you're going to be able to stay in that facility for a while um into inside of that house for a while and operate your business you don't have to worry about the lease coming to an end the other question that I see a lot from operators is they concern about doing this um with

00:06:32 - 00:07:35
with a landlord and a landlord seeing how profitable it can be and then the landlord wanting to kind of take over the business and and run it and kicking them out of the house um I don't think that that's something that you necessarily need to be worried about and the reason why is as an operator you know how hard it is to run the business it's not easy uh there's a lot that goes into it and you have people's lives relying on you and so you need to kind of just be articulate that to them and while it is a business and and it can be

00:07:03 - 00:07:57
profitable it's hard work it takes a lot to to go in and and do this and so that's something that you need to just kind of be aware of as you go through the process so you want to articulate that but a longer length of lease is great the next one is going to be how much to charge and um as I was talking with Marlene something that that came up is she's going to charge more than she would for just a single family to live in the house and I think that's totally appropriate she's a accepting a little

00:07:30 - 00:08:23
bit extra Risk by having a business in her house and having multiple people and uh just kind of the everything that goes with running an assisted living facility now they're they're not tenants that are going to be tearing up walls or anything like that but there's potential for change over and you might have families coming to visit and things like that so it's just you know something you want to to make sure that you're aware of and so charging a little bit more of a premium plus it's a business it should be

00:07:57 - 00:08:58
generating sufficient income for them to cover things um and it's going to benefit you um to to be able to do that and as an operator I think you should expect to pay a little bit more because that landlord is is you know assuming some of the risk and letting you run the business out of the facility I'm not saying you should 2X or even 3x what you would expect um what you would charge somebody for for a normal single family to come in and stay at your house but I am saying you could probably bump it up

00:08:27 - 00:09:28
a little bit you know 50 to 60% more than what you would charge somebody I think that's appropriate uh something you definitely want to negotiate and things like that but I think both parties should expect that there's a little bit higher of of a rate that you're charging and a little bit higher of a rate that you're paying as a landl lord or operator depending on where you land in the Spectrum there now a couple other questions that I think you need to be aware of as a landlord that you want to be getting out and and talking and

00:08:57 - 00:10:05
asking your potential operator about are number one insurance so insurance is going to be key something that all operators need to have and as as a landlord what I would expect my tenant to have is some kind of a renters insurance um to cover the property and then a liability insurance and what you definitely want to do there is make sure that you are listed as an insured entity on that insurance so I would definitely talk to an attorney here and to an insurance broker and make sure you know what type of coverage needs to be in

00:09:31 - 00:10:33
place and how much coverage you need to have in place so you can feel comfortable about where you're at in that process um I think like a $100,000 is going to be too small a million dollar policy probably sufficient um but it's something you would want to have conversations with attorneys and insurance brokers to make sure you're on the right page it's also something that as a landlord you could put into your lease agreement that basically States um you know any any of the Li ility that happens to the to a resident at the

00:10:02 - 00:10:57
facility is passed on to the operator um through their insurance and they have to have um appropriate insurance that has um these thresholds on it and you could build that into the lease so that they are are putting it in there again talk to attorney talk to an insurance broker make sure you have what you need there but you can put those stipulations in there it's going to give you some added protection and help you out through the process there next one is zoning and I put zoning on here for big reason and

00:10:30 - 00:11:35
and that is for you as the landlord if you have somebody that wants to operate and they come to you and they say hey I'd love to turn your house into a care home and you're like okay well you know what does that look like is it zoned properly um like are there any Renovations and they say I don't know we'll figure it out that for me is a red flag what you want to hear when an operator comes to you is they say yeah I was actually just talking to the city zoning and planning guy and he said that you are actually zoned perfectly for

00:11:03 - 00:11:55
it's not going to be a big deal or I talked to them and they said we need to rezone it but the process is the simple application and and we'll be able to do it um or if they come to you and they say yeah I actually was talking to the Fire Marshall and what we're going to have to do is make a few Renovations here on the restroom um to get a ADA Compliant um but other than that I think we're good those types of things are what you as a landlord want to hear you want somebody to come to you and say

00:11:29 - 00:12:21
this is what it's going to look like this is what needs to happen I've had these conversations already and it's going to give you that added comfort that you've got a good tenant that's going to be there running a sufficient you know a successful business as you go through the process and the next one is a business plan and uh with that business plan you're going to um be looking at somebody that as a landlord I would ask them for a business plan um how are they going to operate the facility what's it going to look like

00:11:55 - 00:12:44
what are their long-term goals and having that written out is going to be beneficial to you and for those of you who are operators I have and we'll put this in the link Down Below in the description um a a a business planning guide it's going to kind of guide you through the process of how to build a successful business plan underwrite your facility make sure you're confident in it made it super affordable get down to the link there and you can access it it's going to help you and walk you through the process of building that out

00:12:20 - 00:13:18
so you could hand that over to a landlord or you could hand it to your lender or uh to other investors and things like that it's just it's is super useful going to help you out through your process um for sure and and help you reach your investment goals now I want to talk to those of you who are operators and what it's going to look like for you as an operator and what you should expect and what you need to bring to the table here and the first thing you need to bring to the table is a plan you need to I was just talking about the

00:12:49 - 00:13:43
business planning guide you need to have something that you can give to them and say hey this is my plan for the facility um I already own one I'm looking to expand to three you're number two or you're the first one but I really want to get five um and and kind of explain what it is that you want to do how you're going to run that facility how you're doing your policies and procedures how you're building out all of that stuff come to the table with the plan present it to them and the more that you have that information intact

00:13:16 - 00:14:05
and you're giving it to them the more likely a landlord's going to be like this is actually a really good idea for me I think I'm going to look into a little bit more and I think I might work with this person because they seem to know what they're doing uh it's going to help you out through the process there uh so it's going to it really is going to benefit you um and and something I highly suggest that you get into next is to do your homework before you start engaging a landlord and I was talking

00:13:40 - 00:14:38
about uh City zoning and planning and Fire Marshals um even the State Health Department you want to have those conversations before you go and talk to a landlord and you want to know what it's going to look like and if the Fire Marshall says yeah you're doing a care home which is great from a um you know occupancy standpoint I think you're going to be fine but you are going to have to make sure that the bathrooms have grab bars in them and you're going to have to make sure that the sink is um wheelchair accessible or whatever it is

00:14:09 - 00:14:59
um figure out what those things are so that when you come to the landlord and you're saying Hey I want to do this you can answer the questions these are the types of Renovations that I think might need to go into your house unless you already have it which would be great um but if not this is what I think we're going to have to do to the house to get it to to where it needs to be and and that's going to benefit you a ton as an operator because you're going to know what those expenses are and you're

00:14:33 - 00:15:28
coming again to the landlord with a plan on what that's going to look like and how it's going to work so those are two just key things and the other thing I would say is you should probably be offering to pay for some of those improvements if you've got to make a renovation to a restroom you should probably be offering to do that uh it's going to add value to the landlord it's going to make them more likely to want to work with you and for you as a landlord uh what you need to know about this type of a facility is the

00:15:01 - 00:15:52
renovations that we're making are not destroying the value of your home in any way if anything they're going to make it better because we want as operators we want to have an atmosphere for our residents that is comfortable and that they love and it feels like home and so we're making Renovations that are going to be aligned with that and so that's something you want to keep in mind as you go through this process and you're looking at operators they are not going to be your typical tenant that's going

00:15:27 - 00:16:25
to put holes in the walls or anything like that they're going to keep a very nice home because they want this to be cozy for the people that they are trying to bring into the home to serve through the care home or the assisted living facility so something you want to do um but you know that's something as a as an operator you probably want to build into your pro forma that you need to do x amount of money in renovations to the house and in the case with Marlene she was actually really excited because

00:15:56 - 00:16:50
that's what the operators came to them came to her with saying I need to update this bathroom and she in her mind was thinking I've got to do the bathrooms anyways so why would I not work with these people they're going to give me more money they're going to renovate my house and they're going to be low um just like residents that aren't going to be rough on the house um and and doing things so it kind of makes a lot of sense for her and so the operator I don't I don't know them um that talk to

00:16:23 - 00:17:14
Marlene but they seem to have been doing everything that they should be doing everything I'm suggesting in this video they are doing it right and that's great um something that that people should be aware of and take note of now if you're here live I would love if you could like the the the video and subscribe and hit the Bell notification because it's going to notify you when we go live I'm trying a few different softwares I think I found one that works really well um it's just going to have this kind of thing up

00:16:48 - 00:17:35
in the corner U but that's okay for right now uh while we're while we're a small Channel and then we'll we'll change that but I think this is going to work hopefully this is the third time today so I'm fingers crossed hoping that this is a good stream uh but if you could like the button subscribe hit the Bell so you get notified uh and and then you can interact with me here on the channel as we go through the process just make sure I don't have any comments here uh looks like I don't have anybody

00:17:12 - 00:18:07
right now but that's okay um if you could get on and ask me the questions that you have as you go through the process I'd love to kind of help you and educate you and answer any questions that you have as we go through this kind of look at this as a a live training and you can get in here and ask me questions as we go along so want to thank you here for for being with me on the channel today uh just a reminder that you can get over to the website Assisted Living investing. net leas agreement lease

00:17:39 - 00:18:35
agreement we'll have that link Down Below in the description for you to to get in and and get access to that lease agreement it's going to help you out through the process um both as a landlord um because you'll have something as a starting point but also as an operator I think it's going to help you out quite a bit because it's going to let you see what that lease is going to look like and what you could expect to see and what you could expect to to kind of come interact with as you're getting your lease in place and

00:18:07 - 00:18:57
if you're an owner operator and you own the you know you own that that real estate this lease is going to be great it's it's very simple basic lease it's going to be a great opportunity for you to to do that as well so again I want to thank you for being here with me does residential Assisted Living sound interesting to you but you just don't know where to get started at Assisted Living investing. net we are here to help help you through the process start to finish I want to thank you for being

00:18:32 - 00:18:48
here get down and get that free lease agreement down below and thanks for watching and have a great day

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