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Think You Want To Start A Group Home?

  • Providers,
  • healthcare real estate


Studies show that community-based homes or “group homes” — small, residential facilities designed to serve small groups of individuals with disabilities — can lead to increases in adaptive behavior, productivity, community integration and level of independence for the individuals who live in these settings. Services and programs being delivered in these homes help individuals overcome challenges and live happier, healthier lives.

Today, it’s harder than ever to succeed as a care provider. Legislation, regulations, and workforce issues make delivery of high-quality care challenging. Understanding what to consider before starting a home can help you be on your way!


It’s Like Starting Any Other Business.

The first thing you’ll need is a detailed business plan. Include details on projected expenses and revenue, annual budgets, annual occupancy rate targets, operational and marketing plans, and all legal or financial requirements. In many cases, starting a group home may mean becoming a registered provider with your state and meeting a variety of licensing requirements.


TIP: Seek out your state provider association to inquire about additional aspects that you should consider. Ask to be introduced to other providers who can share their experience.


Starting A Group Home Can Require Creative Financing.

As with any small business, getting a group home up and running requires a significant investment. For most small business owners of community-based homes, owning their real estate is almost always better than leasing. The ownership of the real estate gives you control and flexibility. If you have the capital for a reasonable down payment to buy your property and still have sufficient operating capital, then purchasing is a good option. That is, unless your long-term plans are for rapid growth. If you want to grow quickly, leasing may be the better option. Sale leasebacks are highly customized to meet a provider’s operational goals.


TIP: Providers who pursue sale-leaseback financing can capture the full market value of their real estate and use these funds to fuel their growth.



It Takes Passion.

While our country’s growing elderly population will create a growing demand for smaller, more home-like family settings for seniors in the U.S., don’t expect that starting a community-based home to be an easy way to “get rich quick”. Operating a residential care home involves long hours, significant expense and plenty of frustration. It’s best to get into the business for nothing other than a passion for helping vulnerable people.


Location Is Key.

Just like in any real estate transaction, it all comes down to location, location, location. You will need to review local and state requirements for a community-based home and keep in mind that only certain areas are legally zoned for this type of home.


You Can’t Do This Alone.

No matter how big your group home will be, a staff is necessary. You’ll need to hire caregivers, housekeepers, food specialists, and admissions coordinators. Keep in mind that the group home industry often has high staff turnover due to the nature of the work.


TIP: Becoming a registered provider with the state will give you access to numerous benefits and resources.


You’ll Want To Make It Feel Like Home.

A community-based residential environment is intended to simulate a typical family life as much as possible. People who live in these environments have more choices and control over their lives, have more friendships, are engaged in their communities, are safer, and experience greater life satisfaction.

Scioto Properties specializes in real estate for people with disabilities and service provider organizations. We know that inside the homes and facilities we deliver, lives are being changed. Services and programs are being delivered that help individuals overcome challenges, reach milestones, and live healthier lives.


We partner with care providers across the US. From property acquisition to zoning strategies to sales/leasebacks, we make a difference in your ability to do your business.