How to Convert Your Home Into an Assisted Living Facility


With soaring medical and prescription prices squeezing the pocketbooks of seniors on fixed incomes, many find that a nursing home, retirement home, or other are beyond their reach financially. If you are contemplating a remodel, either to accommodate a loved one or for supplemental income, you may be able to treat it as an, because these are private businesses unable to receive Medicare or Medicaid funds, unlike nursing homes and retirement homes, which must be licensed.

Whether caring for a family member or creating a business, this kind of arrangement offers several mutual benefits. Seniors who become housebound in a traditional residence may experience increasing levels of difficulty in maintaining their property. They can become depressed and isolated and risk being stranded with an injury. Benefits to the property owner might include supplemental income, increased sense of purpose and community, and the satisfaction of caring for a loved one. Before you decide to move forward, however, you have several issues to consider.

State Law, Accreditation, Zoning and Building Codes

Assisted living facilities may not be nationally regulated, but every state has different rules governing these businesses. The National Assisted Living Federation of America compiles and can be a good place to start your research.  An assisted living facility can opt to become accredited by organizations such as or, though it’s not required. whether you plan to apply for accreditation or not, these are excellent resources to begin researching what is expected of a top-notch facility.

Check local zoning laws and building codes, or call the Zoning or Code Office to discuss your plans. They can often provide different ideas and specific information on how to make your dream a reality while remaining compliant. Various options might include accessory dwelling units, in-law apartments, or multi-unit residential properties. Be flexible with your ideas in this stage, because you may need to make some workarounds to your plan to meet regulations.

Every municipality is divided up into zones, with some designated as residential (with various population density stipulations), some designated Commercial or Industrial, and others designated mixed use or rural/farm use. Sometimes exceptions can be made within these zones, called variances, which must be formally approved by the municipality. Other considerations may be the maximum household capacity of the septic system, which cannot be exceeded without extra sitework. Is it permissible to have separate utility meters such as power and water on your property? Are there underground water, sewer, gas or electrical lines that may need to be linked to an added location?

Legal and Tax Ramifications

While one option would be to create a sole proprietorship in your own name to manage these affairs, it could also be possible to create an LLC or corporation to separate the affairs of the business entity from your personal finances, but it will be best to to determine the option that’s right for your situation. Once you have decided on a business structure, it will also be important to speak with a certified public accountant to discuss potential tax issues and structure your business in the most beneficial way possible.


Next, you’ll need to contact your home insurance provider to discuss the insurability and rates of the proposed property modifications. You might find out that there are certain ways of building or remodeling your structure that would allow you to qualify for certain discounts, so ask questions and shop around to be sure you are getting the best deal. If you will be insured as a business instead of as a sole proprietor or property owner, you may need additional things like surety bonds or special liability coverage, but your insurance agent can walk you through these options.

Market Rates and Financing

After getting the ordinance, legal, tax, and insurance issues squared away, it will be time to formally price out the cost of the most viable option and determine whether or not you will need to apply for financing.  Research what other Assisted Living Facilities are charging for a specific square footage of living space, and make sure to find out what amenities they offer to residents so that you can compare your project accordingly.

If you have equity in your home, you might opt to take cash out through a refinance, second lien, or HELOC (“Home Equity Line of Credit”), but if you will be taking on this project as a corporation instead, you may need to obtain business financing. In this case, the bank might request a formal. Because you would have already done much of the legwork and should have much of the necessary information at your fingertips, this can be relatively simple. Once you have determined what your estimated income might be from this venture, the final thing to work out for your business plan and project will be the overall design and cost of the remodel or accessory unit.

Building to ADA Accessibility Standards

Whether you have a loved one who is fully ambulatory or you’ve secured your first tenant by using a, it’s important to cover all future bases by making sure your remodel or accessory unit will be and able to be easily used by someone in a wheelchair or with other mobility issues. ADA, or the, provides a great deal of resources and guidance for designing spaces that will be easily accessible. If you will be adding a standalone unit to your back yard, there are some move-in-ready options such as, sometimes called a “Granny Pod,” which offer all of the latest features helpful to senior residents.

A few things to consider will be designing sinks and countertops at the correct height with the ability for a wheelchair to roll up to access these spaces, special with grip handles and benches that can be accessed by a person in a wheelchair, and ramps leading to all entryways that meet ADA standards for ramp width and slope gradient.  By taking the time to these aspects up front, you prevent the possibility of having to remodel later.  Keep in mind that seniors might have difficulty downsizing from a larger home, and if your space is relatively small, they may need extra onsite storage options or even at first.


It’s possible if you have come this far successfully, you might have developed a business model that is scalable and can be done elsewhere for an additional profit. If you find this type of work truly inspires you, it could even become your primary occupation in time, or you could become a consultant or advocate for others looking to help a loved one of their own.

Providing seniors with an affordable assisted living facility option and helping homeowners develop a new income stream can be a meaningful and rewarding experience. Once you have completed your project and are ready to bring in your first tenant, Turbo Tenant can provide you with a host of property management resources, including a and much more.