How to Buy a Care Home – What to consider

Buying a care home and starting a business in care can be a rewarding venture, both financially and personally, which is why it’s important to think about what drives you to pursue this goal.

Perhaps you already have industry experience, and you have decided to apply your knowledge and expertise into care home ownership, or perhaps you are considering opening a care home in an under-served area to support the local community.

Care homes can also represent a physical asset, which, if well maintained, will appreciate in value as time goes on. The consistent maintenance of a property will ensure and enhance its condition, which will preserve its utility and desirability.

The Health and Social Care sector is one of the most substantial pillars of support in every society, and continuous investment is crucial to improve overall public health outcomes, but also to relieve pressures on the NHS. It is resilient in the face of economic crises as it provides essential services that will always remain in demand regardless of the economic climate. This makes the sector a more secure and reliable investment. 

Every successful business begins with thorough research and preparation. Once you have established what drives your ambition for care home ownership, it’s time to build a framework and lay the groundwork for a successful care home.

Running a care home is expensive and requires careful adherence to regulatory standards. These standards are necessary to ensure that only dedicated and qualified providers can successfully enter the market. In order to pave the way for this success you will need to do thorough research by speaking with care providers and care workers: getting involved with care associations, taking part in care-related events, and seeking guidance from a business consultant with experience in care businesses.

The main factors and key considerations when managing a care home:

The type of Care Home – Funding, staffing and space planning will differ according to what type of care home you decide to buy.

• Residential Care Homes – offer personal care, like help with dressing, washing, meals, or taking medication.
• Nursing Care Homes – in addition to personal care, they offer medical care as well from registered nurses.
• Specialist Care Homes – cater to more complex needs such as learning disabilities or dementia.

Equipment – Your care home will need to be equipped with appropriate medical and safety facilities, wheelchairs, beds with adjustable settings, grab rails, call bell systems, anti-slip flooring and more. Equipping your care home with adaptive devices like mobility aids, text-to-speech software, screen readers or Braille display devices will greatly improve your service users’ quality of life.

Staff and Training – Build a team with similar goals and values to your own. Hire qualified and empathetic staff with a desire to deliver exceptional care, but also make you hire the right number of staff according to the number of beds in your care home and the level of care provided. Foster a safe and supportive environment for your team. When staff feel confident in their skills, it builds trust with clients and their families. Therefore it’s important that you provide your staff with ongoing training in areas such as moving and handling, first aid, infection control, end of life care, and opportunities for NVQ within health and social care, and regular refresher training. 

Market analysis is essential to supporting long-term business success and offer consistent, high-quality service. This form of preparation will help you set realistic fees and effectively position your offering. This helps with supporting the financial sustainability of your business.

Market research includes:

Local competitors – Understanding the strengths and shortfalls of your competitors helps identify gaps or opportunities that can make your business stand out. You can start by visiting competitors’ websites and reviewing:

• Pricing – Do they charge flat fees? How are their prices compared with the average local income?
• Customer satisfaction reviews – Helps you understand how well they cater to the local population’s needs.
• Occupancy rates – Provides insights into local demand and market saturation. High occupancy rates suggest strong demand, whereas low occupancy rates may indicate oversupply.
• Overall reputation – A competitor with a strong reputation has high standards for care which you need to match or exceed. In contrast, a competitor with a low reputation can reveal unmet needs which your home can address.

Demographics – Research local demographics, and look into what the average income of the local population in your area is. This helps determine if your clients will be able to afford care and if you will potentially need financial assistance from your local authority. It’s also important to assess the local age profile to determine demand and ensure your services align with the community’s needs.

Entry barriers – When entering the care market, buyers must navigate complex compliance requirements from the Care Quality Commission (CQC). This includes stringent regulations for care quality, health and safety standards, and record-keeping. These regulations and standards are also subject to change in order to remain in line with the best health practices, and not acting in accordance with them can result in fines, legal actions or other sanctions. Your values and standards must be aligned with the CQC’s Key Lines of Enquiry (KLOE) in terms of care quality, involvement and person-centred approach, but also how well-led the home is. Conducting thorough due diligence and staying updated on the industry regulations are important steps in preparing to enter the care market.

When it comes to location and property, you may be considering purchasing an existing care home, or building your own care home from scratch. Below we are going to delve into each option, and how it can affect costs and startup time.

Buying an already existing Care Home

As you are researching care homes on the market, there are several factors that need to be thoroughly considered. The property must be able to accommodate the specific needs of its residents and be equipped, or able to be adapted with accessibility features like lifts, ramps, but also to ensure the safety of the residents and staff, through installing emergency response systems and proper fire regulations.

Buying an existing care home can be a strong option for several reasons:

• Since the business is already operational, staff are employed and residents are in place, you can benefit from quicker cash flow.
• Long-standing relationships with clients and their families bring stability and predictability in revenue.
• The care home may already have operational systems in place, like care planning software, making the transition smoother and reducing the learning curve.
• A valuable but intangible asset is the care home’s established reputation, backed by a CQC rating and a good relationships with clients and their families which enhances trust and attracts new clients.

You can begin your search on portals that list care-related businesses like Carehome.co.uk, where care homes are usually advertised through the number of beds and en-suites.

Occupancy levels offer insight into a care home’s reputation and overall performance. Following an inspection, the CQC will also rate the care home against how safe it is, how it’s managed, and how efficiently it caters to residents’ needs.

Engaging specialist property agents or business brokers for care homes and nursing homes can help you find properties that best fit your budget and criteria, and to understand market valuations.

Building a Care Home

Compared to buying an existing care home, building a new care home from scratch involves higher financial and time investment.

On one hand, it allows you to build a modern, compliant facility tailored to residents’ needs and one that meets current care standards. It also gives you full flexibility in terms of design and services, giving you the opportunity to also target underserved niches, like culturally competent care.

On the other hand, there is a potential financial risk involved as it can take a long time before the business becomes profitable and fully operational due to the initial costs, land acquisition, marketing efforts, and the gradual process of finding residents to occupy beds.

If you want to build your own care home, consider partnering up with care consultants, architects and other care home operators as their insights can support your decision-making and plan for the long term.

Due Diligence – Before buying a care home, carrying out due diligence is essential. It helps you identify potential legal, financial, and operational risks early on.

This includes inspecting your property to ensure it’s in good condition, checking your staff’s qualifications, reviewing legal documents and contracts, and ensuring compliance with regulatory requirements.

Registering with the CQC – To register your new care home, you must send an application to the Care Quality Commission. In this application you will be required to provide information about the care provider and the registered manager. You will also need to demonstrate that your care home meets the quality statements, submit the required documentation for your business plan, and outline the policies and procedures you have in place.

There is no fixed timeframe on how long it will take for your application to be reviewed. The registration assessment is rigorous, and the processing time can range from several weeks to a few months. Once your application is submitted, the CQC will schedule an inspection visit. It’s important to ensure your premises are in optimal condition and ready for review.

The application has two stages: validation and assessment. First the CQC will confirm that they have received your application. If they are unable to validate it, they will reject it, and you’ll need to resubmit.
During the assessment stage you may be required to provide additional information or take part in an interview together with your registered manager. 

Writing a strong business plan for a care home is an essential step towards securing funding for your business. A well-structured business plan will serve as a blueprint for managing your care home and will also build trust with regulatory bodies and investors. The plan should include:

• A clear summary outlining your vision and the objective of the care home, such as specialist support, dementia care, or domiciliary care.
• Financial projections such as start-up costs, pricing models, and occupancy forecasts.
• All the market analysis you’ve carried out, including local demand, demographics and competition, highlighting the services you will provide and your care home’s value proposition.
• Operational planning, including staffing structures, compliance with the CQC, health and safety protocols and staff training plans.

Creating a strong business plan is the first step to obtaining funding from lenders or investors. A detailed business plan will provide reassurance that your care home will operate successfully in the long term and generate enough income to cover costs and loan repayments. Investors and lenders will need to see evidence of demand in your chosen location, your staffing and care strategies, as well as how your care home will meet the CQC standards.

Whether you're planning to purchase a new care home or take over an existing facility with growth potential, securing the right funding is essential. Here are some of the options available:

Personal funding — If you have the means to self-fund your care business, it gives you full control over how the money is spent and helps you avoid potential debt. However, it also carries a high personal financial risk if unexpected costs arise, so this option requires careful consideration

Government loans — Your local authority may support you when buying a care home, especially if it will serve an area with high demand for social care or provide specialist services. Each grant or loan has its own requirements for applying, so it’s best to talk to the grant body and assess your options. Grants or business support schemes may also be available through LEPs (local enterprise partnerships). The key to securing support from your local government is to present a solid business plan and show how your care home will meet community needs and align with council values.

Equity funding — Equity financing involves raising capital by offering a share of ownership in your care home business to private investors, such as angel investors or family offices. This type of funding can be particularly useful when purchasing a new care home as it reduces the need for large loans and offers greater flexibility around repayments. To secure equity funding, you’ll need to present a clear business plan that demonstrates long-term growth potential, stable income projections, and strong returns, while also building trust through sector expertise and transparent operations. 

The care sector is built on communication, visibility and trust, so it’s important to build a marketing strategy with these values in mind. Your future residents and their families will make their decision not just based on costs and facilities, but the care home’s reputation, the reassurance and trust your brand conveys, and the overall impression of the environment.

• Sharing client testimonials and real-life stories can help build trust and offer an authentic insight into the quality of care and the personal experience of your clients.
• Start a professional website and extend your presence on social media platforms. This allows you to give your audience instant access to updates, posts that highlight your services, daily activities, and the overall atmosphere of your care home.
• Engage in local outreach by participating in care-related events, organising open days and partnerships with GPs or community groups. 

Trust is the foundation of every meaningful relationship, shaping everything from first impressions to long-term reputation— not only the mutual trust between you and your staff, but most importantly, the trust families place in you when entrusting the wellbeing of their loved ones to your care.

Trust is built through transparency, quality care, compassion and open communication, but it also relies on well organised, efficient systems behind the scenes.

Reliable Care Home Solutions play a key role in maintaining this trust. By ensuring care is consistent, closely monitored, and well documented, these systems provide residents and families with the confidence that their wellbeing is managed with both compassion and professionalism. Our market-leading care solutions are fully configurable to support every aspect of care delivery, from managing daily routines to ensuring compliance and accurate reporting.

Book your demo today to learn more about our solutions, or contact us and one of our experts will guide you through the ways we can best support your new care home.