How the estimate works
The calculator uses the same method professionals use to price a care home. First it computes your net operating income — annual revenue minus operating expenses, before mortgage, depreciation, income taxes, and one-time items. Then it divides that NOI by the cap rate you select to estimate value. A lower cap rate produces a higher value for the same income.
In detailed mode, you can build revenue from the ground up — licensed beds × occupancy × monthly rate × 12 — and the tool shows how much value you'd unlock by lifting occupancy a few points. That makes it easy to see why a half-full facility is worth far less than the same building at 95%.
Cap rate benchmarks by facility type
The cap rate is the single biggest lever in the estimate. As a rule of thumb, larger and more stabilized facilities trade at lower cap rates (higher values), while small owner-operated care homes trade higher:
| Facility type | Typical cap rate | Why |
|---|---|---|
| Large stabilized community (50+ beds) | 6.5% – 7.25% | Institutional buyers, lowest risk |
| Mid-size facility (17–50 beds) | 7.25% – 8.5% | Regional operators and funds |
| Small residential care home (6–16 beds) | 8.5% – 10%+ | Owner-operators, higher operational risk |
Ranges are directional and move with interest rates and local demand. Confirm current rates for your market with a specialist. See our guide to assisted living cap rates for detail.
Worked example
Say a 40-bed community runs at 92% occupancy with an average rate of $5,200 per resident per month, and its operating expenses come to 68% of revenue:
| Annual revenue | 40 × 92% × $5,200 × 12 ≈ $2,296,000 |
| Operating expenses (68%) | ≈ $1,561,000 |
| Net operating income (NOI) | ≈ $735,000 |
| Cap rate (mid-size) | 7.5% |
| Estimated value | $735,000 ÷ 0.075 ≈ $9,800,000 |
Drop occupancy to 82% and NOI falls to roughly $560,000 — about a $2.3M swing in value at the same cap rate. That sensitivity is why buyers scrutinize occupancy trends and why the calculator surfaces it directly.
Why the broker-verified valuation matters
This tool gives you a fast, honest ballpark. A specialist goes further: they normalize your financials with add-backs (an owner's above-market salary, true one-time costs), confirm a market-supported cap rate for your area and facility type, and factor in occupancy, licensing, and condition. That's the number you take to a sale. When you're ready, they can also walk you through how to sell your facility.
Want the detail behind the math? See how to calculate NOI, assisted living cap rates, and the full valuation guide.
Frequently asked questions
How is an assisted living facility valued?
On its income. Value equals net operating income (NOI) divided by a market cap rate. This tool computes your NOI from revenue minus operating expenses, then divides by the cap rate you select to estimate value.
What cap rate should I use?
Institutional assisted living has recently traded around 6.75%–7%, while small residential care homes usually run higher (roughly 8%–10%+) because they carry more operational risk. Use the presets or slider to see how the rate changes your value.
How do I value a facility by beds instead of revenue?
Switch the calculator to Detailed mode. Enter licensed beds, average monthly rate per resident, and occupancy; it estimates annual revenue (beds × occupancy × rate × 12), applies your operating expense ratio to get NOI, and divides by the cap rate. It also shows how much value each 5 points of occupancy adds.
What is a good profit margin for an assisted living facility?
Operating margins (NOI ÷ revenue) commonly land in the 25%–40% range for well-run facilities; smaller care homes with an owner-operator often show lower reported margins until you add back the owner's labor. The calculator shows your live margin as you type.
Is this valuation accurate enough to sell on?
It's a solid starting estimate, not an appraisal. A specialist normalizes your financials (add-backs, one-time items) and applies a market-supported cap rate to reach a defensible number. Request the free broker-verified valuation for that.
Informational only — this estimate is not an appraisal, tax, or investment advice. Verify current cap rates and your facility's financials with qualified professionals before acting.