Assisted Living Startup Costs

Written by Dave Lavinsky

Assisted Living Business Plan

Thinking about starting an assisted living facility but unsure about the costs? Dive into our comprehensive guide on assisted living startup costs that breaks down every dollar you’ll need to invest. From land and building expenses to the finer details like furniture and medical equipment, we’ve got you covered.

Discover what it takes to establish a thriving facility and ensure a comfortable and safe environment for your future residents. Developing an effective assisted living facility business plan is crucial for managing these startup costs and guiding your investment strategy.

Capital Investments

Capital investments are the one-time expenses needed when starting an assisted living facility. These include land, buildings, renovations, equipment, and other essential assets.

1. Land

If needed, purchasing land for your facility will be one of the first major expenses. The cost can vary widely based on location and size, but you should expect to spend between $100,000 and $500,000. Urban areas or locations with higher demand for senior care services will be more expensive. Purchasing land is rarely needed to open an assisted living facility.

2. Building

If needed, constructing a new building or purchasing and renovating an existing structure will be the most significant capital investment. Construction costs for a new facility can range from $200 to $400 per square foot. For a 30,000 square foot facility, this translates to $6,000,000 to $12,000,000. Most assisted living facilities do not require new construction, just a buildout of an existing building.

3. Interior Buildout

The interior buildout will include modifications necessary to meet healthcare standards and create a comfortable living environment. This includes plumbing, electrical work, flooring, and interior design. Renovations for an existing building can be slightly lower, ranging from $500,000 to $1,500,000, depending on the condition of the building and the extent of required modifications.

4. Furniture and Fixtures

Your facility will need to be furnished with comfortable and durable furniture, including beds, chairs, tables, and medical equipment. Depending on the size of the facility, you can expect to spend between $300,000 and $700,000 on furniture and fixtures.

5. Medical and Safety Equipment

An assisted living facility must be equipped with medical and safety equipment to ensure the well-being of its residents. This includes items like medical beds, emergency call systems, first aid kits, and defibrillators. Plan to invest around $100,000 to $300,000 in medical and safety equipment.

6. Kitchen and Dining Facilities

Outfitting a commercial kitchen and dining area is essential for preparing and serving meals to residents. Costs for kitchen equipment and dining furniture can range from $200,000 to $500,000.

7. Security Systems

Security is crucial in an assisted living facility. Installing a comprehensive security system, including cameras, alarms, and access control systems, can cost between $50,000 and $150,000.

8. Licensing and Permits

Obtaining the necessary licenses and permits to operate an assisted living facility can involve various fees. These costs can range from $10,000 to $50,000, depending on your location and the specific requirements of your state and local authorities.

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Non-Capital Investments

Non-capital investments are ongoing expenses necessary for the day-to-day operation of your facility. These include working capital, staff salaries, marketing, and other operational costs.

1. Working Capital

Working capital is the money needed to cover daily operational expenses until your facility becomes profitable. For an assisted living facility, it’s wise to have $200,000 to $500,000 set aside as working capital the initial monthly expenses for an assisted living center such as utilities, supplies, and other operating costs.

2. Staff Salaries

Staffing is one of the most significant ongoing expenses and thus greatly affects your assisted living center’s profit margins. You will need to hire a range of personnel, including caregivers, nurses, administrative staff, and support staff. Salaries can vary, but for a medium-sized facility with 30 to 50 employees, you should budget around $500,000 to $1,500,000 for staff salaries in the first year.

3. Initial Marketing and Advertising

Marketing and advertising are essential to attract residents to your facility. Initial marketing efforts, including website development, online advertising, print materials, and community outreach, can cost between $50,000 and $100,000.

4. Insurance

Comprehensive insurance coverage is necessary to protect your business from various risks. This includes liability insurance, property insurance, and workers’ compensation insurance. Annual premiums can range from $50,000 to $150,000.

5. Initial Rent/Lease

If you are leasing a property instead of purchasing, initial rent payments and security deposits can be substantial. For a suitable facility, expect to pay $10,000 to $30,000 per month in rent, with an additional security deposit of one to three months’ rent.

6. Supplies and Utilities

Your facility will require a steady supply of consumables such as cleaning supplies, medical supplies, and office supplies. Utilities, including electricity, water, and internet, will also be ongoing expenses. Budget around $50,000 to $100,000 for supplies and utilities in the first year.

7. Training and Development

Investing in training and development for your staff is crucial to maintaining high standards of care. Initial training programs and ongoing professional development can cost between $20,000 and $50,000.


Starting an assisted living facility requires a substantial initial investment, but careful planning and budgeting can help you manage these costs effectively and increase how much your assisted living center makes. Here is a summary of the key startup costs:

Capital Investments

  • Land: $100,000 – $500,000
  • Building: $6,000,000 – $12,000,000 (new construction) or $1,000,000 – $5,000,000 (renovations)
  • Interior Buildout: $500,000 – $1,500,000
  • Furniture and Fixtures: $300,000 – $700,000
  • Medical and Safety Equipment: $100,000 – $300,000
  • Kitchen and Dining Facilities: $200,000 – $500,000
  • Security Systems: $50,000 – $150,000
  • Licensing and Permits: $10,000 – $50,000

Non-Capital Investments

  • Working Capital: $200,000 – $500,000
  • Staff Salaries: $500,000 – $1,500,000
  • Initial Marketing and Advertising: $50,000 – $100,000
  • Insurance: $50,000 – $150,000
  • Initial Rent/Lease: $10,000 – $30,000 per month + security deposit
  • Supplies and Utilities: $50,000 – $100,000
  • Training and Development: $20,000 – $50,000

By thoroughly understanding and planning for these costs, you can set your assisted living facility on a path to success. Proper financial management and a focus on providing high-quality care will help you build a reputable and profitable business in the senior care industry.

Capital Investments
Land $10,000 – $50,000 (depending on location and size)
Building $50,000 – $200,000 (for construction or purchasing a small property)
Location Buildout $20,000 – $50,000 (for preparing the location to host ATMs)
Furniture $2,000 – $5,000 (for necessary office furniture)
Equipment $5,000 – $10,000 (for necessary office equipment)
ATM Machines $3,000 – $10,000 per machine (cost of ATM units)
Computers $2,000 – $5,000 (for office computers)
Non-Capital Investments
Working Capital $20,000 – $50,000 (for daily operations and cash reserves)
Initial Rent/Lease $5,000 – $15,000 (first few months of rent or lease payments)
Staff Salaries (3 months) $15,000 – $30,000 (for initial staff wages)
Initial Marketing and Advertising $5,000 – $10,000 (to promote the business)
Supplies $1,000 – $3,000 (for necessary office supplies)
Insurance $2,000 – $5,000 (for business insurance policies)


Assisted Living Facility Business Plan PDF

Download our assisted living facility business plan pdf here. This is a free assisted living business plan example to help you get started on your own assisted living business plan.

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