How Much Is An Assisted Living Facility – When we shop, various thoughts run through our heads. We ask ourselves if we will actually use the item, if we really need it, or if it is worth the cost. Sometimes the answer is no and we return the item, other times we buy it. We often place an item at other places like Walmart, Amazon, Target, etc. to check the price. We want to get the best offer for the item in question. However, when looking at offers, sometimes we find a product similar to what we want, but much cheaper, and then we ask another question. We ask why. Why is it so much cheaper at one retailer than another? We worry that the item will be damaged, robbed, or lost even if the item is not available. These concerns lead to getting only the original product, even if it is a bit expensive. In today’s blog, we’re going to look at the cost of assisted living facilities and what we’re doing to make our cost worth it.
According to Kensworth’s 2020 Cost of Care Survey, the average monthly cost for a private room nationwide is about $8,000, while a semi-private room is about $7,500. Now, this monthly bill doesn’t just cover room and board. For the average assisted living facility, monthly expenses include functional furniture, food services, cleaning and laundry services, staff maintenance, nursing services, medication management, and administration and operations.
How Much Is An Assisted Living Facility
Of course, there are other costs associated with pricing that you may not see or think about. Some of these costs include lawn maintenance, building maintenance, employee wages, building rent or mortgage, and if transportation is provided, it covers that cost as well. At The Wildflower of Rigby we cover all of the above services and building maintenance, except transportation, but there are specialized services that do not provide all assisted living facilities. For example, at The Wildflower of Rigby we offer in-room TV and cable, in-room security, memory storage and more.
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Not-for-profit facilities may not have margin, but many facilities do. What’s the margin, you ask? Margin is best illustrated in retail sales. So, using our previous analogy of checking different stores for a particular product, each store will have different tags on the same item. A margin allows each store to make a profit on the product rather than selling it at the price it was purchased. In terms of assisted living, we spend a certain amount every month to pay staff, maintain buildings, purchase health supplies, etc. Business owners cover the cost each month at the same rate as it costs us to run it all for you. Since Wildflower of Rigby is a non-profit, we don’t want it to go down every month, so we put stickers on the rooms. Just like a regular store does for all its products.
Here is a breakdown of the cost of a room in an assisted living facility. Once you see it broken down, it becomes much easier to understand and comprehend, and it also allows you to learn more about what you’re getting into when you have to house a loved one. It allows you to compare properties and find the perfect home with all the essentials and extras your loved one needs, at a price you can afford! Recently, the Active Duty Passive Income Facebook group has had several questions about investing in assisted living facilities. As someone who has recently invested in this class, I would like to offer some insight into the buying process.
Dollar for dollar, there is no better real estate investment than residential property. They are usually Class A properties that are well-maintained, but offer more income than your average multi-family home at the same price. However, in my experience, there is no competition. I think investors are scared. If you can structure your business correctly, you can avoid all the headaches associated with running a business and enjoy the rent checks of a qualified operator (who will be grateful for the work). This blog post is my story about how I bought my first assisted living home.
I bought my first home in 2016 as a primary residence. The following year, I left the reserves and went on active duty. During transition, that first house was my first rental. Four years later, the capital was almost 100 thousand! With my PCS moving to the other side of the country, it seemed like a good time to sell and move a large property. In a sneaky stroke of real estate genius, I started browsing listings on loopnet.com (just FYI, it’s a joke, loopnet is usually where real estate deals go to die.) So, I searched for the highest possible listing. Ratio for my price.. I was shocked to find a beautiful class A house with 25% cap rate.
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I called the listing agent and sure enough, it was a foreclosed home that had been on the market for months. When I showed that I was a serious buyer and was looking to sell my previous property, the estate agent sent me the details. To be clear – I don’t know how to run an assisted living home, but the realtor suggested I could help find a qualified operator. This is one of the many reasons why finding an agent to help you buy an investment is so important!
My biggest concern was not closing this property, the operator was cold. So, before I made an offer on the property, the operator and I discussed the terms. He agreed to a $2,500 non-refundable deposit and a higher lease. I would own the property and she would run the business. Due to the high operating costs of assisted living, I agreed to rent for the first month for free, 4k per month for 2-6 months, 6k per month for 7-12 months, and 7k per month for 13-36 months. The operator covers all maintenance except the roof. Finally, we do not sell the property during the lease term.
I was very happy with my funding. I was able to find a lender willing to do a conventional mortgage with 15% down and 3.5%. At 610k, my mortgage is about 3k. Considering I do nothing but collect checks from this property, this is an absolute home run.
Because they demand high rents from their customers, the houses are in pristine condition and are usually in desirable neighborhoods. As a result, they cost even more than your average single-family rental. After getting help in life, I will never invest in anything else.
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About the Author: Travis Salley is an active duty officer in the US Army stationed at Fort Huachuca, Arizona. He is a real estate investor and licensed financial advisor. Travis can be reached at [email protected].
Kelly is a 14-year Air Force spouse, real estate agent, real estate investor and virtual assistant. After starting as an intern at ADPI in 2019 and then serving as the ADPI Blog Coordinator in January 2020, she is excited and proud to take over as ADPI’s new Community Manager in November 2020. He looks forward to building our community and supporting our members. In their real estate investment journey.
Our team strives to educate, guide and empower active duty service members, veterans, military spouses and families to achieve financial independence by building passive income through real estate investing. Our goal is for Active Duty Passive Income (ADPI) members to own America as much as possible. As the aging population in the United States continues to grow, more seniors are faced with the decision to use home care or move into an assisted living community. Assisted living and home care is a complex decision, and it’s not as simple as staying at home or moving to an assisted living community. The decision is far from a unique situation, and each option has many positive and negative sides. This blog post will help you or a loved one weigh the pros and cons of choosing between home care and assisted living.
When you or a loved one needs 24/7 care, an assisted living community is usually a more affordable option than home care. According to Genworth research, in 2021, the average monthly cost of assisted living will be $4,429, or $53,148 per year. In comparison, the average cost of home care is 24/7 care
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