How Much It Cost to Open a Nursing Home: Examples & Budget
Starting a nursing home requires a substantial investment, with costs varying by size, location, and care level.
Based on 200 franchised nursing homes, small facilities may need $2,000,000 for construction, basic equipment, and staffing. Larger, premium facilities with custom interiors, advanced technology, and full staffing can cost up to $4,000,000.
This post explores real-world examples from franchised nursing homes. We break down startup costs, providing low and high estimates for construction, equipment, staffing, and technology to guide your investment.
FREE NURSING HOME BUDGET TEMPLATE
This is our free budget template built for entrepreneurs who need to estimate their startup costs for a nursing home. We’ve included low and high estimate cost breakdowns. Free download.
Example: 200 Real Nursing Homes
Here’s a table showing the average investment (startup costs) required to start a number of nursing home franchises: the Bee Hive Homes franchised nursing homes.
Please note these are based on franchised businesses, using the public disclosure of about 200 real franchised nursing homes of the Bee Hive chain.
On average, as per this example, it costs between $3,400,000 and $5,100,000 to build a Bee Hive Homes nursing home.
Now that the breakdown below does not include the franchise fee of $65,000 (irrelevant for independent nursing homes). Also, it assumes the purchase of land and building costs of a 8,000 to 12,000 square feet building, hence a fairly large nursing home.
Instead, below we are giving some low and high estimates for a 5,000 to 10,000 sq. ft. facility.
Nursing Home Startup Cost Breakdown
How much does it cost to start a nursing home? Starting a nursing home can cost between $2,260,000 and $4,800,000, depending on the facility size, location, and level of care provided.
Smaller facilities can begin with essential renovations and basic medical equipment. High-end nursing homes require a larger investment in premium setups, advanced technology, and comprehensive staffing and insurance coverage.
- Low Estimate: $2,260,000 covers a 5,000 sq. ft. basic facility construction/renovations and essential medical equipment.
- High Estimate: $4,800,000 covers a 10,000 sq. ft. premium equipment, custom-built interiors, and advanced patient care systems.
| Cost Item | Low | High |
|---|---|---|
| Facility Construction & Renovation | $1,850,000 | $3,700,000 |
| Medical Equipment & Supplies | $200,000 | $500,000 |
| Licensing & Regulatory Fees | $10,000 | $50,000 |
| Staffing Costs | $100,000 | $300,000 |
| Insurance | $20,000 | $100,000 |
| Furnishing & Decor | $50,000 | $100,000 |
| Marketing & Advertising | $20,000 | $50,000 |
| Technology & Software | $10,000 | $50,000 |
| Total Estimated Cost | $2,260,000 | $4,800,000 |
Facility Construction & Renovation
Facility construction and renovation costs are among the largest expenses when starting a nursing home. These cover the purchase or construction of the building and required modifications to meet healthcare regulations. Costs vary based on location, facility size, and customization.
- A low estimate of $1,850,000 covers basic construction or renovation of a smaller facility, around 5,000 sq. ft. This includes essential modifications like installing accessible features, basic interior design, and regulatory compliance upgrades.
- A high estimate of $3,700,000 applies to larger facilities, around 10,000 sq. ft., or premium setups. These typically involve custom-built interiors, expanded treatment areas, advanced plumbing and HVAC systems, and luxury upgrades to create a high-end environment for residents.
| Cost Item | Low | High |
|---|---|---|
| Land Purchase or Lease | $300,000 | $700,000 |
| Building Construction/Acquisition | $1,200,000 | $2,500,000 |
| Interior Renovations (walls, floors) | $150,000 | $300,000 |
| Plumbing & Electrical Systems | $100,000 | $200,000 |
| HVAC Installation | $50,000 | $100,000 |
| Total Construction & Renovation Costs | $1,850,000 | $3,700,000 |
Medical Equipment & Supplies
Medical equipment and supplies are crucial for providing care in a nursing home. Costs depend on the facility’s size, care level, and treatment specialties.
- A low estimate of $200,000 covers essential items like patient beds, mobility aids, and basic medical devices. This is suitable for smaller homes focused on general elderly care.
- A high estimate of $500,000 includes advanced equipment such as monitoring systems, specialized treatment devices, and intensive care equipment for homes offering rehabilitation or specialized medical services.
| Cost Item | Low | High |
|---|---|---|
| Patient Beds & Mattresses | $50,000 | $100,000 |
| Mobility Aids (wheelchairs, walkers) | $30,000 | $75,000 |
| Medical Monitoring Systems | $30,000 | $100,000 |
| General Medical Supplies | $40,000 | $100,000 |
| Specialized Treatment Equipment | $50,000 | $125,000 |
| Total Medical Equipment & Supplies | $200,000 | $500,000 |
Staffing Costs
Staffing costs are one of the most significant ongoing expenses in a nursing home, reflecting the need for qualified healthcare professionals and support staff. We have included below estimates for the first 3 months of operations:
- A low estimate of $100,000 covers essential staff, including nursing aides, general caregivers, and administrative personnel. This budget works for smaller homes with fewer residents and basic care services.
- A high estimate of $300,000 accounts for full-time registered nurses, specialized caregivers, and additional support staff, ensuring 24/7 care for larger facilities or those providing specialized treatments.
| Cost Item | Low | High |
|---|---|---|
| Nursing Aides & Caregivers | $50,000 | $150,000 |
| Registered Nurses | $30,000 | $100,000 |
| Administrative Staff | $10,000 | $25,000 |
| Support Staff (cleaning, kitchen) | $10,000 | $25,000 |
| Total Staffing Costs | $100,000 | $300,000 |
Furniture & Decor Costs
Furniture and decor are essential for creating a comfortable and welcoming environment for residents. These costs can vary based on the size of the facility and the level of luxury desired.
- A low estimate of $50,000 covers basic furniture for patient rooms, common areas, and dining rooms. This estimate is ideal for smaller, modest nursing homes.
- A high estimate of $100,000 includes premium furnishings and decor for a more upscale facility, with higher-end furniture, decorative elements, and enhanced comfort for residents.
| Cost Item | Low | High |
|---|---|---|
| Patient Room Furniture | $20,000 | $50,000 |
| Common Area Furniture | $15,000 | $30,000 |
| Dining Room Furniture | $10,000 | $15,000 |
| Decorative Elements | $5,000 | $5,000 |
| Total Furniture & Decor Costs | $50,000 | $100,000 |
