AFH Break-Even Calculator
Estimate the number of residents and occupancy rate needed to cover monthly fixed expenses, based on the rate and variable cost you enter.
These calculators provide estimates for planning purposes only. Actual costs, reimbursement rates, taxes, staffing requirements, licensing requirements, and profitability can vary by location and individual circumstances. This tool is not financial, legal, tax, licensing, or medical advice. Results are based on entered assumptions.
How it works
- Contribution margin is the average monthly rate minus variable cost per resident.
- Break-even residents equal monthly fixed expenses divided by contribution margin.
- Break-even occupancy is break-even residents divided by licensed beds.
- Revenue at break-even is break-even residents multiplied by the monthly rate.
- Estimated profit at full occupancy uses every licensed bed at the rate and variable cost you entered.
Example using the default assumptions
If fixed expenses are $8,000, the monthly rate is $6,500, and variable cost is $500 per resident, contribution margin is $6,000. Break-even residents are about 1.3, or roughly 22% occupancy in a 6-bed home. Your numbers will differ.
Important assumptions
- Fixed expenses do not change with occupancy in this model.
- Variable cost is treated as a per-resident monthly amount, such as food.
- Staffing is not automatically treated as variable unless you include it in variable cost or fixed cost.
- If the monthly rate is not higher than variable cost, the home cannot break even on occupancy alone.
- This is not a cash-flow or loan-underwriting model.
Frequently asked questions
What does break-even mean for an Adult Family Home?
Break-even is the occupancy level where estimated revenue covers the fixed and variable costs you entered. It is not a measure of owner income after tax.
What should I put in monthly fixed expenses?
Include costs that stay similar whether you have four residents or six, such as rent or mortgage, insurance, and baseline utilities. You can also include a baseline staffing amount if you staff a similar number of hours regardless of occupancy.
What is variable cost per resident?
Variable cost is an expense that rises as you add residents. Food is a common example. Some homes also treat supplies or certain care add-ons as variable.
Why might break-even occupancy exceed 100%?
If fixed costs are high relative to the contribution margin, you may need more residents than you are licensed for. That means these assumptions do not cover costs at full occupancy.
Does this include loan payments?
Only if you include them in monthly fixed expenses. The calculator does not separate principal, interest, or depreciation.
Can I use this for a 2-bed or 8-bed home?
Yes. Enter your licensed bed count and local costs. Capacity and rules still depend on your license and state requirements.
Need another AFH estimate?
Explore occupancy, staffing, startup costs, Medicaid rates, and other Adult Family Home planning tools. Every calculator is free and works without an account.
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