The 5 Biggest Expenses in Assisted Living (And How to Budget for Them)

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Starting an assisted living facility? You need to know where your money's going.

Before you start pricing furniture or shopping scrubs for your staff, you’ve got to understand your biggest monthly costs — the ones that will eat up 75–80% of your budget.

If you get these right, everything else becomes a lot easier.

Let’s break down the five major expenses you'll be dealing with — and how to plan for them.

Check out this video, too;

Why It Matters

✅ If you don’t understand your expenses, you’ll price your rates too low
✅ If you price too low, you’ll lose money or burn out
✅ When you budget properly, you stay profitable and sane

These five costs will dominate your monthly expenses, and knowing how to estimate them will make or break your ability to be profitable.

🧑‍⚕️ 1. Staffing (Your Biggest Expense)

Staffing is the #1 cost in assisted living. No matter where you are or how you operate, this is going to be a large chunk of your budget (usually 50-70%!).

Here’s why it adds up:

Most homes need at least 2 caregivers per shift
Add in an administrator, housekeeper, and possibly a part-time nurse
If you provide 24/7 care (which you'll need to do if you're a licensed facility), that’s 3 shifts per day, 365 days a year

Tip: You can save money if you're also the administrator or nurse, but make sure you still pay yourself something. Don’t run yourself into the ground for “free.”

🏠 2. Debt Service (Your Mortgage or Rent)

Whether you own or lease the home, you’ve got to plan for this fixed monthly cost.

If you’re:

Buying the home → budget for mortgage, taxes, and insurance
Leasing the home → plan for rent and any triple-net (NNN) lease fees

📍 Tip: Use an underwriting calculator to model different rent or mortgage scenarios. This will help you understand how many residents you need to break even.

🛡 3. Insurance (Non-Negotiable)

You need the right insurance to stay licensed and protected.

Here’s what to expect:

Liability insurance
Property insurance
Workers comp

🧠 Bonus: Some states require minimum coverage amounts — check your local licensing body to stay compliant.

💡 Tip: Talk to an insurance broker who specializes in senior care. It could save you thousands a year.

🔌 4. Utilities (They Add Up Fast)

If you’re housing 4+ people full-time, utilities stack up. You’re not just heating and cooling a home — you’re running a small operation.

Plan for:

Power ⚡

Gas 🔥

Water 💧

Waste 🗑️

Internet & Streaming 📺

🔄 Seasonal Reminder: Power goes up in summer, gas in winter — plan ahead.

💰 Bonus Tip: Use vendors who help negotiate better rates on waste services. One small change with our waste services contract saved us thousands a year.

🎥 Streaming Tip: Instead of cable, create a custom streaming setup for residents. But don’t skimp — if a favorite channel keeps them happy, it’s worth the $10/month.

🍽 5. Food (Per Resident, Per Day)

Food is another big monthly cost, but it’s easier to predict once you understand PRPD (Per Resident, Per Day).

Here’s the formula:

# of Residents × $/Day × Days/month = Monthly Food Budget

🧮 Example:
10 residents × $8/day × 30 days = $2,400/month

Where to Buy:

Use Costco or Sam’s Club for bulk savings
Consider using meal planning tools like Grove Menus for recipes + shopping lists
Use delivery services like Walmart+ to save staff time (worth the few extra bucks)

🥕 Tip: PRPD can vary by state — search online for your state’s average or adjust based on your experience (but I usually see $8-$10 for a PRPD).

Next Steps: Take Action Today!

🚀 Want to launch your assisted living business in the next 12 months?

✅ Step 1: Download the Business Plan Checklist to start planning.
✅ Step 2: Apply for the Assisted Living Investing Mastermind for expert coaching.
✅ Step 3: Follow this guide, take action, and bring your vision to life!

Got questions? Drop them in the comments below! ⬇️

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