What is the profit margin of an assisted living facility?
Direct answer
Well-run assisted living communities typically earn net operating income margins of 15% to 30% of revenue. Margins depend most on occupancy, payor mix and staffing costs, which typically make up 50% to 70% of operating expenses. Those margins are measured before debt service and owner distributions.
What to know
Margins rise with occupancy above 85% and a strong private-pay mix, and they fall with occupancy under 75%, heavy Medicaid dependence and agency staffing.
Third-party management, if used, typically costs 5% to 8% of revenue.
Depreciation and income taxes also come out of NOI before the owner sees cash.
How Haven helps
Haven values communities on their actual operating statements. See What's My Property Worth.