How to Calculate Your Sober Living Home's Break-Even Point

What's the Break-Even Point for Your Sober Living Home?

Your sober living home breaks even when total monthly expenses divided by revenue per occupied bed equals your current bed count - typically around 70% occupancy for most operators.

According to Vanderburgh House, the math is straightforward: break-even occupancy equals total monthly expenses divided by revenue per occupied bed. In practice, that means $7,200 in monthly operating expenses divided by $900 revenue per bed requires 8 occupied beds to break even.

The industry data reveals a problem. At 70% occupancy, many sober living homes can't cover expenses-a figure Sobriety Hub cites that assumes your revenue per bed and expense structure align perfectly. Most don't.

The occupancy bands tell a different story. Vanderburgh House research shows that at 80% occupancy, break-even becomes possible depending on rent levels, while 90-95% occupancy creates healthy margin potential. Mature operations run at 80-95% occupancy year-round, which is why experienced operators survive turnover cycles while newcomers struggle.

Revenue expectations matter more than break-even calculations suggest. Homes with solid systems gross $8,000-$10,000 per month, according to Kent Fai He. That assumes you've solved intake, retention, and house management to keep beds filled.

The upscale segment operates differently. Fixed overhead reaches $126,000 per month-or $1,512,000 annually, per Financial Models Lab-requiring different occupancy and pricing. These facilities target 92-96% average occupancy for sustainability, allowing flexibility for admissions, maintenance, and resident transitions.

Ikon Recovery Center points to 80-90% as the ideal occupancy rate for balanced community and financial stability. Oxford House of Colorado achieves 83.4% occupancy, showing that sustainable operations cluster in this range rather than pushing for maximum capacity.

Your break-even calculation becomes meaningless if you can't maintain the occupancy rate it requires. The data suggests most operators need systems that deliver performance well above their theoretical break-even point.

Sources

• Vanderburgh House
• Sobriety Hub
• Kent Fai He
• Financial Models Lab
• Ikon Recovery Center