Assisted living vs nursing home: what residents pay

Commercial Real Estate Investing
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Assisted living vs nursing home: what residents pay

Joena Mureithi
Boston, MA · Member since 2026 · 38 posts · 7 votes

If you’re underwriting a senior housing deal, the starting question is what the resident actually pays per month, so I pulled the national numbers.

CareScout’s 2025 Cost of Care Survey (data collected July to November 2025) puts the national median for assisted living at $6,200 a month. For nursing homes it reports daily rates: $315 a day for a semi-private room and $355 for a private one. That works out to roughly $9,600 and $10,800 a month, which is my own math from the survey’s annual figures. So the gap between assisted living and a semi-private nursing home bed is around $3,400 a month per resident.

Two cautions if you use these numbers. First, these are medians across facilities of every size, so a small residential home in your market could price above or below them. Second, assisted living usually bills a base rate plus add-ons for higher care levels, so the headline rate often isn’t the final bill.

On the demand side, the Census Bureau’s 2018 projections have older adults outnumbering children in the US by 2034, which is why this segment keeps drawing attention from investors.

I work on the education side at RAL Roadmap, and rate questions come up with almost every person we talk to who’s evaluating a first home. The most useful check we know is calling a handful of local competitors and asking for the full fee schedule in writing.

If you operate or invest in this space, what base rate are you seeing in your market, and how much of a typical bill comes from add-ons?

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    2w

    Joena, I like that you're starting with what the resident actually pays rather than just looking at the headline monthly rate. For underwriting, I’d probably separate the base room revenue from the care and other add-ons and then work backward through staffing, food, utilities, insurance, property taxes, maintenance, management, and debt. The $6,200 or $9,600 headline number doesn't tell you much about the investment until you know what it actually costs to produce that revenue.

    I'd also add the tax side to the model. Senior housing can be a little different from a straightforward rental because you're potentially dealing with both the real estate and an operating business. If you're acquiring an existing facility, I'd want to understand what you're actually buying and how the purchase price is being allocated between the property, improvements, equipment, furnishings, and any business assets.

    That can have a meaningful impact on depreciation and the after-tax return. So I'd compare opportunities based on net operating performance + real estate value + after-tax return, rather than resident revenue alone.

    Feel free to DM me, I’d be happy to send over a few resources that might be helpful.

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  • Nicholas FloydBusiness Member
    NY · Member since 2026 · 327 posts · 104 votes
    2w

    Joena, great breakdown. I think one thing investors sometimes overlook in assisted living is that the monthly revenue is only part of the equation. Staffing, insurance, licensing, occupancy rates, and operating expenses can make a big difference in profitability.

    I work in business funding, and I think having access to the right capital is just as important as finding the right property. Depending on qualifications, SBA loans, business loans, lines of credit, and revenue-based funding can provide options for operators looking to acquire, renovate, or expand their facilities.

    I’m curious, since you work with people entering this industry, are most of them looking to purchase existing assisted living facilities or start their own from the ground up?

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  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    2w

    OP. Could you look up the info as follows. It is my understanding these businesses make less than 1% net income per year as an Industry. The money is in the building (which another entity owns) and not the Assisted Living business. I don't think this is a RE investment. It's a business discussion, unless you're the one leasing the facilities. Then the metrics are different.

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 644 posts · 270 votes
    2w

    @Joena Mureithi These national figures provide a useful reference point, but the most important underwriting number is the actual all-in monthly revenue per occupied resident in the specific market—not simply the advertised base rate.

    The fee schedule matters because two facilities with the same starting rate can produce very different revenue and resident experiences. Care-level charges, medication management, incontinence support, transportation, community fees, and other add-ons can materially change the final bill. Those charges should be evaluated for both collectability and transparency rather than treated as guaranteed revenue.

    Revenue also needs to be connected to the cost of delivering care. Higher-acuity residents may support higher fees, but they can also require more staffing, training, supervision, insurance, and regulatory compliance. Occupancy assumptions should account for move-ins, move-outs, hospitalizations, resident turnover, referral relationships, and the time required to fill a vacant room.

    Calling local competitors is a strong first step, especially when the comparison includes room type, included services, care tiers, deposits, annual increases, availability, and waiting lists. It can also help to speak with referral sources and families, since posted pricing does not always reveal what residents ultimately pay or why they choose one provider over another.

    The demographic trend may support long-term demand, but it does not make every project viable. A sound deal still depends on local affordability, payer sources, licensing, staffing availability, competitive positioning, and enough operating margin to provide consistent care. National medians can frame the opportunity; local operating realities determine whether the investment actually works.

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  • Denise SuppleeBusiness Member
    Realtor · Willow Grove, PA · Member since 2017 · 1k+ posts · 662 votes
    2w

    The monthly rate is only part of the picture with senior housing. The level of care can make a big difference in what a resident actually pays.

    If you're looking at one of these investments, I would want to know exactly what is included in the base rate, what the additional care charges are, and what residents are actually paying each month. I wouldn't use a national average to underwrite the deal. I'd talk to several local operators and find out what the real numbers look like in that market.

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  • Ibrahim Mawri
    Dearborn, MI · Member since 2016 · 14 posts · 2 votes
    1w

    Start with local fee schedules, not the national median. The CareScout number is useful as a sanity check, but assisted living bills are base rate plus care add ons, and those add ons vary a lot by market and by how heavy the care mix is. On the expense side, rebuild staffing from the ratios you would need to run the home, not from the seller's current payroll. Once the seller steps back, agency fill and overtime often show up where the P&L looked clean. Ask for a trailing 12 month census by care level, not a single month snapshot. If the deal only clears using the seller's labor and a full census, underwrite the vacancy and labor stress before you argue about price.

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  • Account Closed
    New York NY, USA · Member since 2026 · 2 posts · 0 votes
    1w

    Henry's point about the building vs the business is the key one for real estate investors. Most of us are not buying the operations. We're buying the dirt and the building, then leasing it to an operator.

    If that's the structure, underwrite the lease, not the resident rate. The number I care about is rent coverage. Take the operator's EBITDAR and divide by the rent. Healthcare REITs generally want to see 1.2x or better. A facility can have strong resident rates and still be a bad real estate deal if the operator can't cover the rent after staffing, food, and insurance.

    Payer mix matters here too. Assisted living is mostly private pay. Nursing homes lean heavily on Medicaid. Medicaid rates are set by the state and they don't move with your costs. Private pay gives the operator pricing power, but it lives and dies on local affordability. Two facilities with the same headline rate can be very different investments once you see who is actually paying the bill.

    So before I spend much time on the rate survey, I want the lease, the operator's financials, and the payer mix.

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  • Arnav Chopra
    Member since 2026 · 4 posts · 0 votes
    1w

    Franchise Disclosure Documents (FDDs) can provide actual data about senior care & AL businesses instead of national averages. The FDDs will include the initial investment (Item 7), ongoing fees (Item 6), and changes in ownership/opened/closed over the last three years (Item 20). Some FDDs also contain average revenue or occupancy (Item 19); however, many companies don’t disclose it. Even if you would never purchase a franchise, the data provided by an FDD could be beneficial as a comparison when determining the cost to develop and the potential for failure, which matters if you’re underwriting a lease to an operator. Many FDDs are available at no charge from either the WI DFI or MN CARDS websites.

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    • Joena Mureithi
      OP
      Boston, MA · Member since 2026 · 38 posts · 7 votes
      1w

      The part I’d stress is reading Item 20 next to Item 7. The FTC’s guidance notes that Item 20 shows owner turnover and whether nearby outlets have closed, so you can see how often the startup cost didn’t pay off. And read Item 19 closely when a brand includes one, since many don’t. You want to know exactly which outlets and what period the revenue figure covers.

      Minnesota’s CARDS site lists franchise registration documents going back 10 years, so you can compare a brand’s earlier filings against its latest one.

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  • Max Comperatore
    Technology · New York, NY · Member since 2026 · 48 posts · 9 votes
    4d

    Joena, your median gap is the right starting point, but underwriting turns on payer mix and opex, not the sticker rate. Ashish is right to move past headline rent. Here is the cold math I use.

    Take AL at $6,200 per month, or $74,400 per year. At a 70% operating expense ratio, EBITDAR is $22,320 per unit. Budget $500 per unit per year for capex, so economic EBITDAR is $21,820. If you finance 70% of a $250,000 per unit basis, that is a $175,000 loan. At 6.5% interest and 30-year amortization, the debt constant is roughly 7.58%, so annual debt service is $13,265. That leaves 1.64x coverage. Push opex to 75%, and EBITDAR falls to $18,600, dropping coverage to 1.40x before capex.

    Now the SNF side. A semi-private bed at $315 per day is $114,975 per year. Medicaid reimbursement and RN staffing mandates commonly drive opex to 85% to 90%. At 88% opex, EBITDAR is only $13,797 per bed. Add $2,000 per bed per year for capex, and economic EBITDAR is $11,797. If a public REIT structures that as NNN with $9,000 per bed rent, rent coverage is 1.31x. AL is often structured as RIDEA, where the REIT shares upside and downside because labor and occupancy risk sit with the operator. That is the real trade: private-pay revenue versus mandated staffing and payer risk.

    For those operating today, what add-on capture and agency labor percentage are you underwriting in your AL pro forma?

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  • Joena Mureithi
    OP
    Boston, MA · Member since 2026 · 38 posts · 7 votes
    1d

    Your breakdown highlights how much the operating model matters beyond the headline rates. One thing I'd be interested in is how operators account for staffing costs during the early stages, particularly before occupancy stabilises. A home might look profitable at 90% occupancy, but the numbers can be very different when you're carrying nearly the same staffing costs with only five or six residents.

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    • Alode Paul
      Renter · Member since 2026 · 19 posts · 0 votes
      1d

      That early-stage staffing drag before reaching full occupancy is where most new operators burn cash!

      A few ways successful operators manage staffing ratios during the ramp-up phase:

      1. Flexible/PRN Staffing Schedules: Using core lead caregivers on fixed shifts while leveraging PRN (as-needed) staff or PRN agency coverage to match actual resident counts during initial admissions.

      2. Operator-Led Shift Coverage: In small-scale homes (e.g., 6-bed setups), founders often step in to cover key shifts during the first 60–90 days to protect operating reserves.

      3. Phased Admission Schedules: Staggering intake dates so new resident revenue kicks in right as additional shift coverage is triggered.

      Having clear policy manuals that define minimum caregiver-to-resident ratios also keeps staffing compliant without over-hiring early on.

      Are you currently working through financial modeling for an opening phase, or looking at ways to optimize working capital reserves?

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