How much does an assisted living facility owner make?
Direct answer
An assisted living owner's income depends on the community's size, occupancy and costs. Well-run communities typically earn net operating income margins of 15% to 30% of revenue. Owners then pay debt service and taxes from that NOI, and owners who work as administrator may also draw a salary.
What to know
NOI margins depend on occupancy, payor mix and staffing, which typically consumes 50% to 70% of operating expenses.
If you use a third-party management company, budget 5% to 8% of revenue for its fee.
Owners also build wealth at sale. Because value equals NOI divided by the cap rate, every $1 of added NOI adds about $12 to $17 of value at cap rates of 6% to 8%.
Example
As an illustration: a community with $2 million of annual revenue and a 20% NOI margin produces $400,000 of NOI before debt service.
How Haven helps
Haven helps owners understand what their community earns and what it's worth. Read our senior housing market outlook.