Home caregiver vs assisted living: where the monthly bill flips

Commercial Real Estate Investing

Home caregiver vs assisted living: where the monthly bill flips

Boston, MA · Member since 2026 · 43 posts · 7 votes

Most families compare these two on the wrong unit. Assisted living is priced per month and home care is priced per hour, so the two numbers never look like they are fighting each other until you multiply them out.

CareScout’s 2025 Cost of Care Survey puts the national median for a non-medical caregiver at $35 an hour, and for assisted living at $6,200 a month. The survey’s own full-time example for in-home care is 44 hours a week, which comes to $80,080 a year, about $6,670 a month. Assisted living at the median is $74,400 a year. So at 44 hours a week, the home caregiver already costs more than the assisted living bed.

Work the math the other way and the crossover lands at roughly 41 hours a week. Below that, home care is cheaper on paper. Above it, the monthly assisted living rate wins. A parent who needs someone for 20 hours a week is a very different conversation from one who needs overnight coverage.

Two caveats. These are national medians, and a state like Hawaii or Mississippi will move every number. And the hourly figure covers homemaker and home health aide help combined, so it does not include nursing care.

For anyone looking at opening a small residential care home: this crossover is the conversation your family prospects are having at the kitchen table. Does anyone here quote the monthly rate next to the hourly one, or do you wait for the family to ask?

I work with RAL Roadmap, an education platform for people opening residential care homes, and this comparison comes up constantly in the cost modules.

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Michael K GallagherBusiness Member
Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
1w
interesting, thanks for putting it together and sharing. do state contracts and insurance preferences play into the equation in these instances? I anticipate it varies by state?
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- Joena Mureithi
  OP
  Boston, MA · Member since 2026 · 43 posts · 7 votes
  1w
  Yes to both, and you’re right that it varies by state. Medicare doesn’t pay for this kind of long-term care, so for most families it comes down to private pay, Medicaid, or a long-term care insurance policy.
  Medicaid is where the state matters most. Each state decides which services its waiver covers, who qualifies and how many people it will serve, so the same home can look very different in two states. Long-term care insurance depends on the individual policy, so the real comparison is what that policy pays toward home care versus an assisted living stay.
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Arnav Chopra
Member since 2026 · 6 posts · 0 votes
1w
Your math sounds right. On an annual basis, $74,400 would be approximately $1,430 a week. At $35 an hour, this would equate to approximately 41 hours of care each week. Therefore, anybody requiring nearly full-time assistance is already past the point where in-home care costs more than assisted living, and that doesn't include nighttime coverage. This will further alter your calculations.
Any potential investor looking at this matter through a strictly financial lens should consider the following:
1. Many non-medical home care companies operate using a franchising model. Their franchise disclosure documents (FDDs) provide actual data instead of national averages:
Item 7 of the FDD discloses the total amount needed to start up the operation, including an estimate of working capital, rather than merely the initial franchise fee.
Item 6 of the FDD outlines the continuing fees charged to the franchisee by the parent company, usually royalties based on a percent of gross revenue. These are paid for the life of the franchise agreement and come off the top, so the franchisor gets paid before you do.
Item 19 may outline average gross revenue or hours billed per individual location. Since many don't disclose such information, you'll need to make assumptions regarding the same.
Item 20 outlines the number of new locations started; the number of existing locations closed down; and/or the number of locations transferred among owners over the preceding three years. This provides valuable insight into the difficulty associated with maintaining a successful operational business model.
1. The stated rate of $35 per hour is merely the amount collected from families. Once you account for the wages of caregivers; federal and state payroll taxes; employee benefits/insurance premiums; and the aforementioned franchise fees, the net profit per hour is significantly reduced. It is this figure which ultimately determines if your investment will generate a profit.
2. Lastly, geography plays an important role in determining success. Franchises are typically sold by geographic area (Item 12 details this aspect). As such, determine the size of your respective geographic area and whether the brand can place another location in or near your territory.
If anyone's weighing a residential care home against a home care franchise, pulling a few FDDs and comparing those numbers side by side is a good reality check before committing.
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- Joena Mureithi
  OP
  Boston, MA · Member since 2026 · 43 posts · 7 votes
  3d
  Great call on Items 19 and 20, those two say the most about how hard a model is to sustain. The comparison gets even more interesting on the residential side, where revenue comes from beds instead of billable hours, so a full house doesn’t depend on hiring and scheduling caregivers every week. Licensing and bed limits vary a lot by state though.
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