Are there other ways to generate income and revenue from sober homes other than through Rent?
In a simple answer Yes! However, it really depends on what type of group home or sober homes you are operating as well as the location.
For starters, let’s assume that you are interested in starting a group home or a halfway home. Initially, you would like to simply get into the business because you realize that you can have a direct impact on people’s lives and help them improve their standard of living. You also realize that you do not yet “know all there is to know”, so you have decided to start small – with a minimal investment – in order to get your group home started up and therefore go after the higher functioning population rather than starting up an ICF/MH home which requires a lot more knowledge and insight. For example, maybe you would like to go after people with disabilities such as alcoholism.
Initially, you do your math and decide that you can rent a small 4 bedroom home in your community for $1100 per month. Of course, it could be a bit more or it could be a bit less. But for sake of argument, let’s assume that $1,100 is your monthly rent. You then realize that you are going to need to pay for water, gas and utilities which will come out to another $250 or so per month.
Finally, you are going to need to provide some nice services for your clients such as internet and television. Most cities these days have cable, telephone and internet packages for roughly $100 per month. After doing some quick math, you realize that this is going to cost you $1,450 per month! For many of you, that is a lot of money, while for others that is a small drop in the bucket.
Either way, you will need to determine your potential for revenue and see if there is truly an opportunity to make money. Assuming monthly rent of $600 and two beds per room, you would be grossing $4,800 per month. With expenses, you are now netting $3,350 per month!
You have now generated yourself an annual income of over $40,000 per year….all with a small initial investment of furniture and rent of less than a few thousand. Is this good money? Well for many of you, this would be the ultimate blessing. You would be able to retire from your job and begin life on your own terms. You would have a house manager that would manage all the day – to – day activities so that you could focus on starting up your next group home or even take a nice Hawaiian Vacation to reward yourself.
But maybe you are loathe to ask yourself “how do I start another group home” and instead, you choose to focus on creating even more monthly passive income from your existing recovery home, sober home, halfway home, transitional living home, rooming home or disability home. You ask yourself, is there a possibility to make more than $40,000 from one sober home or halfway home?
After doing some research, you find out that many group home operators are pulling down $10,000 and more per month in net income for each house that they own and operate! How do they do that you wonder? Well for starters, many of them have well over 8 people living in a home. Many of these people have 20 people living in a home. At just $600 per person per month, that would be $12,000. Assuming expenses of $2,000; you would have $10,000 in net income per month from your boarding home, group home or recovery home. Yes, $10,000 per month in spendable income.
Yet there are other ways to generate income as well. Many sober home and recovery home operators perform drug screening or work with others that perform alcohol and drug screening on the clients.
With reimbursement rates of $19.99 – $27.38 per test assayed, there is another large opportunity for income creation. As mentioned on the physician officer resource website:
“For a typical, 15-drug screen panel the estimated reimbursement per patient sample is $291.00. Following in-house testing, if you send out specimens for supplemental testing, ensure that your reference laboratory only performs and bills for chromatographic procedures, such as gas chromatography/mass spectrophotometry, to avoid duplicate billing for quantitative testing, which can potentially result in payment denials.”
Now, a lot of it will depend on what state you live in as far as how often one can bill for drug screening in sober homes.
Tests Per Month By State for Sober Homes
New Jersey 2 tests per month
Georgia 25 tests per year
Vermont12 8 tests per month
New York 2 tests per week
Washington 1 test per day
Pennsylvania 1 test per day
North Carolina 1 test per day
California 1 test per day
Texas 9 units per day
Michigan 12 units per day
Maryland 22 units13 per day
Wisconsin No limit
Virginia No limit
Ohio No limit
Missouri No limit
Indiana No limit
Illinois No limit
Florida No limit
Arizona Not disclosed
Tennessee Not disclosed
Assuming “a typical” 15-panel drug test amount of $291.00, with 8 clients you now have generated an additional $2,328 per month in income! What about if the clients were required to receive two tests per month? What if you had additional clients that required testing? You can see how and where money is made. Not only is this additional money for you, but it keeps your clients on the straight and narrow and therefore on the road to recovery. A true win-win for all parties involved!
If you are looking for additional information on how to start a group home, halfway homes, transitional living homes, sober homes, foster homes, ICF/MR home, DADS Home or other type of care home for people with disabilities; check out our free course on starting your very own income-generating group home by entering your email below.
