Unlicensed Care Homes Explained: What They Are and How They Work

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What is an Unlicensed Care Home?

Unlicensed care homes can be a powerful way to start helping seniors without going through the full licensing process. But what are they, exactly? And are they legal?

Let’s break it down in simple terms so you can figure out if this model makes sense for you.

Check out this video, too;

Why This Matters

Getting licensed takes time, money, and paperwork. But some states allow you to care for seniors without a license—if you follow the rules. This can be a faster way to get started, learn the business, and build momentum.

Let’s dive into what unlicensed care homes are, how they work, and how to start one (if it’s allowed in your state).

💡 What Is an Unlicensed Care Home?

An unlicensed care home is a residential home where seniors live together—but the home itself is not licensed by the state as a care facility.

Some key things to know:

🏠 Seniors live in a home setting (not a facility).
💼 No state-level license is required.
🤝 Care is “non-medical” and limited in scope.
✅ Some homes rely on family members or private caregivers.
💰 You can still run a business and charge rent or service fees.

✅ Is It Legal?

Yes—in some states. But you need to follow the rules.

Here’s what to do:

Research your state: Every state is different. Some allow unlicensed care homes if you serve a limited number of residents or don’t provide skilled care.
Understand the limits: Many states allow 1–3 residents before requiring a license. Some say you can help with basic daily needs, but not meds or care.
Use the right terms: Don’t call it an “assisted living facility”. You'd call it a "care home" instead, and you'll want to specify that it's unlicensed.

⚠️ What You Can’t Do Without a License

Every state draws the line differently, but here’s what typically requires a license:

Administering medications
Assisting residents with things like with bathing or toileting
Providing 24/7 staff care

You can’t cross these lines without triggering licensing requirements. Be super clear on what your state says.

🛠️ How to Start an Unlicensed Care Home

Here’s a step-by-step guide:

1. Set Up Your Business

Form an LLC (recommended for liability purposes, but talk to your attorney first)
Get an EIN (Employer Identification Number)
Open a business bank account
Get insurance (property, liability, and workers comp if hiring staff)

2. Find a Home

Make sure zoning allows for a group home (specifically, you want to make sure that multiple unrelated individuals can live in the home)
Look for a property with private rooms and accessible bathrooms
Set up shared living spaces and safety features

3. Hire an Insurance Broker

You’ll need:

🛡️ Property Insurance

🧍 Liability Insurance

👷 Workers Comp (if hiring staff)

Let a broker help you find the right coverage at the best price.

📍 State-Specific Rules (Do Your Research!)

Each state has its own definitions and thresholds.

Here’s what to do:

Go to Google and search:
👉 “How to start an unlicensed care home in [Your State]”
👉 “Unlicensed senior care [Your State] regulations”
Look up your state’s Department of Health or Human Services
Consider calling the health department and asking directly

It’s okay to talk to your health department. You don’t need to keep this a secret.

🤝 Don’t Do It Alone

Talk to people. Ask questions. Share your vision.

Open your mouth and say the things you want to build. That’s how people show up to help you.

Whether you're trying to serve your first residents or build an entire network of homes—don't stay silent.

This journey is hard to do in a vacuum.

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 to 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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