“Tom, owning a residential assisted living facility sounds great, but how much rehab and reconfiguration would I need to do to get the property converted?”
Here’s the scoop from Gene:
The size of the home, the number of bedrooms and bathrooms and the layout are all major considerations when it comes to choosing a home for Residential Assisted Living.
In general, bigger is better.
More bedrooms and bathrooms means more revenue.
Private rooms bring higher income then shared rooms. Private bathrooms can generate an additional $500 to $1,000 a month in additional revenue.
Interior space can be reconfigured to create additional bedrooms.
Adding bathrooms is significantly harder AND more costly though. BUT adding bathrooms will create additional revenue that will typically pay for themselves in less than 1 year.
Converting a large bathroom into 2 smaller ones is an alternative. Converting under-utilized rooms into bedrooms is typical as well.
Consider converting garage space and porches into revenue generating bedrooms and bathrooms as well.
***Always use licensed contractors and get the proper permits when doing this type of work.***
If required, you may need to install a fire suppression system in the home. This can cost $10,000 to $25,000 depending on many factors.
Installing a smoke detection system that is monitored by an outside service may be required as well. That is $1,500 to $3,000 to install and $30-$50 a month to monitor.
If these types of improvements and costs “scare you” at this point, I understand. But you have to look at the cost-to-benefit ratio.
If you invest $30,000 in these renovations and it allows you to make $10,000 per month in net revenue, how long is the “payback” period?
Just 3 months.
That is simple math and answers the question, “is it worth the effort?”
If you add an additional $30,000 in improvements that allows you to generate an additional $5,000 a month, would that be a good investment? Many real estate investors will remodel a kitchen or add a pool or an addition or a deck, that could cost more than that and would only generate a fraction of the revenue that a Residential Assisted Living Home would generate.
The most common improvements to a home do address the safety of the residents.
Grab bars installed in the shower and around the toilet are common.
If you are 85 years old, it’s harder to get up and to keep your balance. They are not expensive and they are pretty easy to install.
Consider widening the doors as well. It doesn’t need to be every door, focus on the doors they will be using the most. 36 inches wide is great. If a senior has a walker or a wheelchair, that’s a real plus.
If you can’t widen the doorway consider an offset hinge. For $15 it gets the door out of the doorway about inch. (An inch doesn’t sound like a lot, but if you’re a senior and using a walker or wheelchair, that inch is going to save your knuckles.)
Smooth floors means less of a trip-hazard.
Carpet is softer but it also increases the potential for a fall because seniors may not lift their feet when they walk and they can actually increase the risk of a fall.
Good smooth surfaces to consider include: hard wood, tile, linoleum and vinyl.
If you’re interested in learning more about Residential Assisted Living opportunities, join us for Gene Guarino’s 2 Traction REIA events this month.
Works nationwide. Join us on Zoom from anywhere.
#1. Main Monthly Meeting
TOPIC: “Profiting from Residential Assisted Living”
SPEAKER: Gene Guarino
Thursday July 16th ONLINE using ZOOM.
Click here to RSVP and get the Zoom link
#2. Training Intensive with Gene Guarino
TOPIC: “How to Turn One Single-Family House into a Monthly $5,000 – $15,000 Cash Flow with Residential Assisted Living Care Homes”
Saturday July 18th ONLINE using ZOOM.
Click here to get your ticket
See you there!
11+ Year Recipient of the National REIA “Honors of Merit”
and the “Award of Excellence”
For Best Real Estate Investor Association!