Considering group home costs per person can be an affordable option for you!
Is there any money to be made with group homes, transitional homes, sober homes, halfway houses, or MHMR homes? Don’t let them fool you!
Let’s get into the high-level details. A 30,000-foot level – of the financials behind running group homes. How about analyzing the group home cost per person?
Businesses come in all shapes and sizes. Whether it is a developer of the land who purchases large tracts of land, it entitles it and sells it off piece by piece. Or an owner of a Thai restaurant who buys 1000 eggrolls and then sells them one at a time. Or it is a local bar that purchases beer by the kegs and then sells them by the individual glass – they all have one thing in common. All these businesses are buying in bulk and selling in smaller pieces. Renting out an apartment is the same thing. And the more apartment units you have in a building, the more rent you will take in. Indeed, the responsibility and obligatory expenses for providing this level of care can be challenging at times. Considering the group home cost per person can dynamically reduce the weight.
Understanding The Money
The group home, assisted living, halfway house or transitional home business is the same from a generic standpoint. Let’s take a standard property, for example, a four-bed, two-bath home. In a typical Texas neighborhood, this property will rent for anywhere from $1000 – $1350 per month. Unfortunately, most features of this nature will cost between $115,000 – $155,000. Without a substantial downpayment, this property will eventually be a money loser every month before any potential appreciation or capital gain. However, let’s assume that you decide to start up an assisted living company, group home company, or something of that nature and rent out the property by the room? What if the rent you collect is $600 per month? Moreover, the bill would make more sense if calculated as group home cost per person. BINGO – Hopefully, you are getting the point. The property now brings in over $2400 per month.
Understanding The Landlord
This type of landlord is not new. Many refer to it as the second oldest profession in the world! Now, take a minute and think about some of the world’s greatest fortunes that initially started from this simple concept. Let me give you a hint; you probably have stayed at one of their hotels, and you may have seen one of their great grand-daughters acting as they worked in the world’s oldest profession. Conrad Hilton started out with a small rooming house in San Antonio, New Mexico, and perfected his craft. The family has since built it into one of the world’s largest hotel chains because of his efforts.
But Hilton is just one example of how a small boarding home, rooming home or transitional house can give you the seed money you need to continue scaling up. There are tens of thousands of group homes throughout the country…and they wouldn’t be around if they weren’t profitable. And then there are the more prominent players- the companies that are owned by private equity. Do you think Steven Schwarzman and Blackstone Group would have purchased Southern Cross, the most significant care home provider in Europe, if this was not a profitable industry? Remember, Private Equity’s job is to MAKE MONEY. In that regard, calculating the group home cost per person can be a practical approach!
The Opportunity is There for You to Take
Although we are only touching on the high-level financial aspects of care homes, nursing homes, group homes, and MHMR homes, it should be fairly clear and obvious that even the owner of a small group home with six residents can make a lot of money with minimal hours with the calculation of group home cost per person. I will let you do the math on seven clients because at $600 per month and a small $950 per month rent or mortgage payment.
Now you must also remember that a “group home” is simply a generic name. Within the “group home” industry, there are hundreds of different “sub-niches.” Also, consider that “group homes” are simply a sub-niche of the real estate sector. That said, each “sub-niche” will have different problems and solutions as well as differing amounts of work required to make the operation run. Student “group-home” living will be relatively passive, as will be elderly group home housing in the 50 – 65 age range. In contrast, violent housing ex-offenders in a group home would potentially be more lucrative but would require more staff and, therefore, management time. These are all things to consider when determining how much money can sweep in a while calculating group home cost per person!
What’s in it for you to run one of these homes? Why wouldn’t you just provide housing to a traditional renter? Watch this video to see the amazing outcome this business model will have on your community AND your wallet:
If you are looking for additional information on how to start a group home, halfway home, transitional living home, sober home, foster home, ICF/MR home, DADS Home or other types of the care home for people with disabilities, check out our FREE 10-PART COURSE on starting your very own income-generating group home.
