Dental and medical practices
What Is My Assisted Living Facility Worth?
The short answer
Most assisted living facilities sell for roughly 4 to 7 times earnings before interest, tax, depreciation and amortization, with the real estate valued as part of the same number when the building is owned. Larger, well-occupied communities with mostly private-pay residents and a full management team sit at the top of that range or above it. Small residential care homes with six to sixteen beds, an owner working in the building and heavy reliance on a state waiver program sit at the bottom, and are often priced closer to the value of the house plus a modest earnings multiple. Census, payer mix, licensing history and staffing costs move the number more than anything else.
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How buyers actually price a facility
There are two numbers in an assisted living deal and it helps to keep them apart. The first is what the operation earns: revenue from residents, less staffing, food, utilities, insurance and management, before any mortgage payment. The second is the building. When the owner also owns the real estate, buyers usually price the whole thing together off earnings, then sanity-check it against a value per bed or per unit for comparable buildings in the area.
Larger institutional buyers tend to work in cap rates rather than multiples, which is the same arithmetic said differently. Dividing a year's operating income by a cap rate of 14% gives roughly seven times income; a 20% cap rate is about five times. When you hear a broker quote a cap rate, translate it into a multiple and the two conversations line up.
If you lease the building, the value is the operation alone and the lease terms matter enormously. A long lease at a rent the facility can comfortably cover supports a normal multiple. A short lease, or rent that eats most of the margin, narrows the buyer pool sharply because a lender will struggle to underwrite it.
Census is the number everyone looks at first
Occupancy — census, in the industry's language — drives everything. Fixed costs barely move between 70% and 95% full, so the last handful of residents carry a disproportionate share of the profit. Buyers will ask for month-by-month census for at least two or three years, not an average, because an average hides a slide.
A facility that has been steady in the high 80s or 90s reads as a stable business. One that has drifted down over eighteen months raises the obvious question of why, and a buyer will assume the answer is competition, reputation, or a referral relationship that has cooled until you show otherwise.
Empty units cut both ways. If you are at 75% because a new competitor opened, that is a risk. If you are at 75% because you stopped marketing while planning to retire, a buyer may treat the empty rooms as upside and pay for the operation while keeping the upside for themselves. Either way, filling beds before you go to market is usually the single most valuable thing you can do.
Payer mix: private pay, Medicaid waiver and everything between
Who pays the monthly bill matters as much as how many residents you have. Private-pay residents, paying out of savings, a pension or long-term care insurance, generally produce higher monthly rates and better margins. State Medicaid waiver programs pay less, sometimes considerably less, and reimbursement rates are set by someone other than you.
That does not make waiver census bad. A facility built around waiver residents with disciplined costs can be a solid, steady business, and its census is often more reliable than a private-pay building competing on amenities. But it will be priced more conservatively, because a rate change decided at the state level can move earnings in a way no operator controls.
Buyers will want the mix in writing: how many residents in each category, average monthly rate for each, and how rates have moved over the last three years. Regular, accepted rate increases are a quiet sign of a healthy building — a facility that has not raised rates in four years is usually leaving money on the table, and a buyer will notice.
Licensing, survey history and the things that scare buyers
Assisted living is licensed at the state level, and every state does it differently. A buyer's first diligence request is usually the survey and inspection history: deficiencies cited, how quickly they were corrected, any plan of correction still open, and whether the facility has ever faced an admissions hold or a fine.
A clean survey record supports the price. A pattern of repeat citations — especially around medication administration, staffing ratios or resident care plans — does not, because the buyer inherits the regulator's attention along with the building. If you have had a bad survey and fixed it properly, have the documentation ready and explain it early rather than letting a buyer discover it midway through diligence.
Licence transfer is its own timeline. Most states require the buyer to apply for a new licence or a change of ownership approval, which can take months and sometimes requires background checks, financial statements and a site visit. This is a normal part of the process, but it means an assisted living sale usually takes longer to close than a comparable non-licensed business. Plan for it rather than being surprised by it.
Staffing, agency use and what the earnings really are
Labour is the biggest line item and the most common place where reported earnings overstate the truth. If you personally cover shifts, do the scheduling, handle the medication cart when someone calls out, or serve as the administrator of record, a buyer has to pay someone to do those jobs. The cost of replacing you comes out of earnings before any multiple is applied.
Agency staffing is the second flag. Filling gaps with agency caregivers at premium rates is sometimes unavoidable, but a facility that runs consistently on agency labour has a recruiting problem, and buyers price that as a permanent cost rather than a temporary one. Show the trend: if agency use has fallen because you fixed pay or scheduling, that is a genuinely good story.
Caregiver turnover, wage rates against local competitors and whether the administrator plans to stay after the sale all get asked about. An experienced administrator who intends to remain is a real asset in a licensed business, and some buyers will offer a retention arrangement to keep them.
Small residential care homes are a different market
A six-bed care home operating out of a converted house is a genuinely different business from a 90-unit community, and it attracts different buyers — usually individual operators or small local groups rather than regional companies or funds. The pricing reflects that.
For homes of this size, the property is often the larger part of the value. Buyers will look at what the house alone would sell for, then decide how much the operating business adds on top. If the owner personally provides much of the care, the earnings may not survive hiring a replacement, and the price ends up close to residential value.
That is not a reason to avoid selling — small homes trade regularly and there are always operators looking to buy one. It just means expectations should be set against comparable small-home sales, not against the multiples quoted for large communities in industry press.
What to prepare before you go to market
Three years of profit and loss statements, with owner compensation, personal expenses and one-off costs identified separately so a buyer can see normalised earnings. Monthly census and payer mix over the same period. A current rent roll showing each resident's rate and level of care.
Then the operational file: current licence, the last several state surveys with any plans of correction, staffing schedule and wage rates, resident agreements, vendor contracts, and a list of capital work done and still needed — roof, HVAC, generator, sprinkler system, call system.
Finally, be clear on what is being sold. Real estate included or leased back? Are you willing to stay on for a transition while the licence transfers? Those two answers determine which buyers can even look at your facility, so decide them before the first conversation.
A worked example
Take a hypothetical 48-unit assisted living community running at 89% occupancy, with $3.4M of annual revenue, 70% private pay, and $610K of operating income after a market-rate administrator's salary. At 5.5 times that is roughly $3.4M including the building. Push occupancy to 95% and drop agency staffing, and operating income near $780K supports something closer to $4.3M. The same facility on a short lease, with the owner acting as unpaid administrator and a recent survey deficiency outstanding, would be underwritten far more cautiously.
Multiple ranges reviewed September 2026. They are a guide, not a quote or a formal appraisal — see how the process works.
Common questions
Is the building included in the value?
If you own it, buyers normally price the property and the operation together off earnings, then cross-check against a value per bed. If you lease, only the operation is being sold and the lease terms drive how attractive it is.
Does a Medicaid-heavy census hurt the price?
It usually means a more conservative multiple, because reimbursement rates are set by the state rather than by you. It does not make the business unsellable — plenty of buyers specialise in exactly that model.
How long does an assisted living sale take?
Longer than most businesses, because the buyer normally has to obtain a licence or change-of-ownership approval. Several months from signed agreement to closing is common, and it varies by state.
What if I have had a bad survey?
Disclose it early with the plan of correction and evidence it was resolved. Buyers accept that surveys happen; what damages a deal is discovering a problem you did not mention.
Should I fill beds before selling?
Almost always. Because fixed costs barely change, additional residents flow largely to the bottom line, and every dollar of extra earnings gets multiplied when the price is set.
How is memory care valued differently?
Memory care generally commands higher monthly rates and needs higher staffing ratios. Buyers look at the same measures but pay close attention to whether staffing genuinely supports the acuity you are billing for.
Can I sell if I am also the licensed administrator?
Yes, but expect buyers to deduct the cost of hiring an administrator from earnings, and to ask you to stay through the licence transition.