Actual Inspector Gross & Expenses

Hi Everyone,

I’ve been seriously entertaining the idea of becoming a home inspector in the state of Washington and wanted to get some more accurate ideas from people who have “been there done that”. What I have gathered so far is that the average inspections is roughly $315. It looks like the average inspector does roughly 175 inspections a year. This comes out to about $55k a year. That sure doesn’t seem like much when you calculate expenses of running your own business. IE Fuel, Tools, Marketing, Insurance, Company Reinvestment…

Corrrect me if I’m wrong on any of the above. I also understand there is a potential for a lot more. It seems like you could do 2 inspections per day without too much of a stretch timewise, which would equate to $155k not including weekends and a couple weeks of vacation. I don’t know if this is feasible though and wanted to get some opinions on it.

Any input on net or gross profits along with some guesstimations of expenses would help me quite a bit. Really any bit of knowledge would be appreciated actually :slight_smile: I’ve been in sales for about 5 years now and do fairly well at it, so I shouldn’t have a problem making contacts for referral work. Alright, now let me have it!

I was a home inspector for 5.5 years and with the exception of the first 30 days (all I needed to hit the ground running)… I never took home less than $1,000 a day. I worked every day except Christmas mornings. I saved nearly a million dollars in 5.5 years (after feeding a family of 4). I can go on and on (and I do) about how to do it… but the key to cracking the code is ancillary services and marketing.

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Thanks for your input. I’m glad to see it’s not impossible. I’m not afraid of hard work (typically work a 12 hour day or more). What do you find the most effective use of your time when marketing? Schmoozing with Real Estate agents seems to be the most common theme I read about. What else do you think has been your effective way to spend time advertising? I actually haven’t read much about ancillary services, what are some of the most important services you think that you offer?


Thanks for the assurance. It looks like your marketing to home inspectors more than the public. Is that true or am I missing the boat? I see that you offer inspection warranties, recall checks and some type of alarm systems service. Would you consider these the most important things or what else do you offer with your home inspections? It also looks like you do pretty good marketing for your services so I would only assume that you market your inspection services just as well. What do you think is the most effective time usage when you start marketing?

Thanks for everyones input, feel free to throw out any information that you think might be useful to me.

Here’s is what it comes down to, Nick is a best case scenario guy. Others struggle. Why?

You must have drive and put in effort or you’ll be one of the guys who quits the first year or two. Yes salesmanship and charisma help to close the deals too, but its about being knowledgeable and personable and having a strong work ethic.

If you are getting into HI because its an easy way to being in $300 in an afternoon, better move on down the road. You have to like it to succeed. You have to be driven and be ready to work your butt off to grow your business. If you do, you’ll succeed.

Many HI guys will tell you it takes a year or two to support yourself at it, but starting any business is hard.

Hi Mike,

I’m definitely not getting in for easy money. I understand that any business is hard, but this seems to be a business I can do on my own with a lower overhead, which is what I’m looking for. If you don’t mind me asking, how many hours per week would a typical HI need to put in in order to be fairly successful ($100k+). I spent my summers growing up working 16-18 hour days all summer break on my parents farm so hard work is not foreign to me. I am just making sure I don’t spend months of my time and $5k for licensing to find out that it won’t pay for my bills and some good times.

I never “schmoozed” real estate agents. As a top producing REALTOR for a decade, I can assure you… not a single agent in N. America refers their clients to a home inspector because the home inspector “schmoozed” them. You are so off base, I don’t even know where to begin.

I cant speak for any inspectors but me, but I spend about 8-10 hours a day, sometimes more. If I don’t have inspections I do some drive by’s or work on networking or marketing.

It’s not just hours inspecting vs expenses. Got to market to keep the schedule filled. I don’t really know how many hours I spend, I don’t track it. The time I spend on this board is work hours too.

As for the $100k and over. I aint there yet. Not so sure.

I don’t know what you think I meant by schmoozing. I basically meant meeting with them to talk and show them that you are knowledgeable and would be a good source to use for home inspections. Making sure that they are comfortable to refer clients to you and that you will do the job well, basically selling yourself to them.

I would assume that is the point of meeting with them, the same as any other sales meetings I attend when representing my company to a prospective client. If I am off base, could you help me out? I’d actually really appreciate some constructive criticism to give me a better picture of the industry.

I understand it’s hard to know an industry without doing it, I’d love to do a “job shadow” and follow someone on a few jobs. If anyone knows someone in the Portland area or surrounding, I’d appreciate a referral to follow along.

I don’t want to ask you anything that would make you uncomfortable so if you don’t want to answer any of these just ignore me but I want to get a feel for the industry. What area do you work in? Would you consider the market above, below or just average for home sales where you are at? Also, do you NET above or below 40k. It sounds like you are newer in the field compared to some of the guys on here, but I may be wrong. What did you have to pay for the necessary equipment to get started once it was all said and done?

All of the above is definitely feasible.
Ancillary services are nice however you need to know what you are getting into with each service.

Do some research on them. depending on your location many have a separate license and or price for insurance.

Termite Inspections
Radon Testing
There are many others.

Also research what it is going to cost you to acquire an ekey from your local real estate association.

Now find out what it will cost you to maintain these licenses and fees for providing services to your customers for a minimum of 6 months with no scheduled inspections.

If you can maintain the out of pocket expense I would say go for it. If you can not I would say save some more money, find some money. or start out with your basic inspection package and build it from there.

Best of luck to you in 2013.

About what are you bringing home in sales now? How many hrs a week do you work now and how many days. Do you have a family/ How old are you? Do you have any experience in the home industry, tradesman, contractor, builder, etc… do you get benefits in your current biz/ WHY DO YOU THINK THIS BIZ IS FOR YOU? do you like getting dirty?
do you like crawling around in other peoples filth. How do you handle terrible smells. Do you like confined places. How about extreme heat or cold?

I met with or presented to thousands of agents during my 5.5 years an inspector… and never once did I attempt: *“to talk and show them that you are knowledgeable and would be a good source to use for home inspections. Making sure that they are comfortable to refer clients to you and that you will do the job well, basically selling yourself to them.”

*That’s a waste of time as I’m sure every agent already has a knowledgeable inspector who does his job well. No point in it.

I’ll go even further and state that in all those thousands of contacts with agents…I don’t ever remember even one instance where I discussed my inspection services.

no offense taken, I’ve been full time HI for a few years, tough to say exactly how long as it had a gradual change from contracting to HI. Last 4 years have all been over 40K in home inspections alone, just haven’t topped 100. Although I expect to be close this year. Only 12 months to find out.

Hi Michael,

I’m currently in a salary position for just under a year now for the first time. Every other sales job I’ve had was at least partial commission and I usually perform in the top 25% of salespeople. I am 24 years old and have a wife and 3 year old daughter. Currently the salary is $47k with a review coming up shortly. It is low because I moved to a different city and it’s the best I could find. In all honesty, I’m not a fan of the salary. I’d rather be paid for what I accomplish. The salary is done 8-5 M-F. Believe me, I’m not stuck to this schedule though as I do usually 20 hours of work on the side to make more (lots of odd jobs). If I found it to be something I liked, I’d be very happy and comfortable working 10-12 hours per day 6 days a week or more when required. I currently have no benefits in my position. The reason that I am looking into this is because I am looking to start a business of my own and this is one of the opportunities I’m considering. I have good interpersonal skills and a great work ethic. Believe it or not, I love getting dirty and using my body. I spent new years eve and new years day cleaning wet fiberglass insulation out of a flooded crawlspace because the owner of the company didn’t have any employees who wanted to. I didn’t have a thermometer but since it was -1° Fahrenheit outside, I can assume (as it felt) that the water in the crawl space was damn near freezing. I’ve worked 18 hour days in 100°+ weather in enclosed spaces for weeks on end growing up on the farm. Hot, Cold, Clean, Dirty, Smelly, Back Breaking doesn’t phase me. I have a strong healthy body and I intend to use it. I have no background in any construction field other than around the house improvement projects and occasionally helping with my brothers restoration company. I understand it will take years to become proficient. I am extremely intelligent and can learn a lot quickly. Believe me though, I realize this is not something that can be learned overnight, Any ideas on where to start getting this education would actually be greatly appreciated.

What I am trying to decide is if someone who is willing to put in an effort can make this a lucrative business, or if the market really has fallen out the bottom as many people on this forum are whining about.

Now Michael,

About what are you bringing home in profit now? How many hrs a week do you work now and how many days? Do you have a family/ How old are you? Did you have any experience in the home industry, tradesman, contractor, builder, when you started? How long did it take you to turn a profit on your investment? How many years have you been a home inspector? Would you consider your market above, below or just average?

Hi Nick,

That’s good to know. Maybe the Real Estate and Home Inspection business is different from all other forms of sales. What exactly do you do to be successful in these meetings then? As I said before, I am very interested in constructive criticism, but so far nothing you’ve said since your original post has been helpful. If your intention is not to be helpful, please stop responding as I’m not interested in having a pointless argument on a forum. Any helpful information is welcome though.

Prospective, I copied this from the MB, and while it seem a bit dramatic, some of the numbers can be debated its a good summary of the HI Journey.

Also, remember the housing market is not as hot as it once was. Improving yes but not crazy like a few years age. Just something to keep in mind when you look at the numbers presented.

*I think this is a very frustrating and difficult career to get into. Wonder they the colleges are not cranking out more inspectors?

Let me see if I can sum up the ideal requirements:
You need to have years of experience in the construction business or in one of the trades, which would take, well… years! Hard to get that coming out of a college!

You need to complete a ton of specialized courses that will cost you 4,000 to 6,000 or more, and take about 2 years of a lot of night school, while, presumably, you try to hold down a day job to pay for all this.

You need some equipment, ie: truck or van, ladders, and as many tools as you are foolish enough to use.

You need a reporting system - either computerized ( more bucks) or check off with comments, or… written. I forgot, most folks coming out of the school system would have to take a course on writing… and spelling … and maths…

Then once you have survived all of this cash outflow, you need to get some on the job training - lets say about 50 ride alongs with an experienced HI. Thats a trick, most are one man shops in an area where they do not want further competition, and live in fear of you stealing their contacts and future business, so that should really make this step a challenge, and take …well, years to complete 50 ride alongs!

You can join an association - preferably a professional one that will put you through a lot of hoops and steps and take months before you are allowed to practice inspections. Or, I suppose you could join some mail order group and have instant certification, which will likely be as recognizable to clients and Real Estate agents as any other “certification”.

Then you need insurance … if you can find a company that will insure a “newbie” and have still some money saved up to pay for the first year = lets say 5,000 to 6,000.(??) Of course, you can decide to go without since by now, you probably will not have any assets left, and are highly unlikely to be able to afford any assets for the next several years if you survive in business as a home inspector.

Now, at last, 3 or 4 years later, you are ready to do inspections. Except that expensive cell phone and business line, are not ringing. So, you have to pound on doors, try to get by the pit bull at the front desk of most real estate firms, actually find an agent in the office, and willing to meet with you. You live in hope, that, once they recognize your lack of experience at inspections, but admire your young eagerness(?!) they will actually put you on their referral list - with all of the other inspectors they have used for years. Of course you will not see instances of agents pushing their “preferred” inspector since they are not allowed to do that!

So, once you are in business doing inspections, then the fall and winter arrive, and you are shocked to find out there is next to no inspection business due to the “slow” season in the Real Estate world. So, you have to face several months of no or negligible income with ongoing steady cash drains to support being in business. Opps, forgot all that money you have to find in order to advertize.

By now you have had to undercut all of the competition with the lowest rates in town in hopes that you will pull some business away from the more experienced inspectors out there, who, mysteriously are no longer talking to you. Suddenly you realize that you still do not have enough coming in to cover the costs. Should you have the misfortune of having to pay for an unhappy client, or worse yet, litigation - then you are really up the creek.

Suddenly, by year two or three, if you have made it that far, you wonder why did you even bother to spend all that time and money to get into a business, that, for many, is very stressful with constant concerns of litigation … and bankruptcy, especially when you realize that many experienced inspectors seem to last less than 7 years in this business, before burn out …or bankruptcy beats them down.

I forgot a couple of other ideal prerequisites, 1) independently wealthy - opps that probably means your assets are at risk
2) very understanding spouse who has a great career and is willing to support you, pay all the bills, watch the savings erode, while you struggle to make a go of this business.
3) a healthy retirement income, so you can enjoy this advocation without worry about making ends meet.

Since 1) and 2) are very hard to find these days, then, many inspectors likely fit into category 3)!

Gee, I wonder why so many are in the 50 to 60 age group?

Fear not, many baby boomers will be retiring so our ranks should continue to grow = with 50 to 60 year olds!

A very interesting statistic. Almost half of us are in the 50-60 age group with none under 30. Do you think this is because colleges aren’t promoting home inspection enough to entry level students.*

I really don’t even know where to start… but I’ll try. First of all, I helped thousands of agents… but never by patty-cake report writing or any of that stuff that inspectors imagine is the reason their competition gets so many referrals.

Telling an agent that you are knowledgeable or thorough or licensed (if you are in a jurisdiction that has adopted licensing) is stupid. The inspector they are currently referring is very likely knowledgeable, thorough, and operating legally. It’s not going to get their attention.

You have to get an agent’s attention. Here is the line I used to get their attention: “Let me give you something to help your real estate business…”

Now that you have their attention, give them just that… something that helps their business (real estate agents are business people). Just make sure that whatever you give them, also helps your business.

This is a sample strategy that I wrote about recently: But there are many more.

Like I said, I don’t remember even one instance where I talked about my inspection services primarily.

The best advice I can offer is: Don’t strive to be average. Be exceptional or stay home. Decide whether you want to focus on quality or quantity at the outset, because it’s hard to change your stripes once you start to build a reputation.

Your target numbers are within the range of top individual inspectors in some markets, but you wont start out there.

IMO: Reputation trumps marketing and it takes some time to create a great reputation.