Actual Inspector Gross & Expenses

Please consider the fact that you will not likely have any benefits and immediately join Nachi Nickles. They can and will help some when no one else will. Job security and reliable income is going to be very important for a long time I believe. I think the next 4 years minimum is going to be terribly difficult for small businesses especially if they play by all the rules.

Wow 100-150 agents? How much do you spend for candy, donuts and other consumables (you know, KY, knee pads, mouthwash etc) Have you read this articleby a well respected home inspection authority? It paints a realistic picture of how the realtor/inspector relationship really works.

Now, subtract all of the operation costs…
A better plan, charge $500.00 per home, do 20 inspections a month…The more you charge, the less volume you have to do…
As the kids say…“just sayin”.

Interesting that Nathan hasn’t responded to the OP’s questions, even though he has been back posting here at least five times since!

Even more interesting, is that he IGNORES the FALSE INFORMATION that he led the OP to believe.

Nathan… why don’t you DISCLOSE to the OP who and what you really are???

Bet you were hoping you could let it slip through the cracks, didn’t you?!!! No way in h e l l !!!

I love this way of thinking. if you charge $10,000.00 for ONE inspection- you only have to do one inspection per month to make $10,000.00 per month. GENIUS!!!

I was simply referring to the numbers in the original post. 315 is not my number. And i don’t think Bushart is “an authority”.

We spend nothing on candy or “mouthwash” as you so eloquently implied. We do not gain referrals by “softening” reports. We gain referrals because agents know a solid, thorough inspection reduces their liability.

I don’t know what it’s like where you work, but in California the inspector is a juicy target for claims. Why would I care if an agent sells a house if it means that I might get sued because of a " soft" report!

Your assertion that just because a HI pursues referrals that he is somehow unethical. That is ridiculous at best, and idiotic at worse. If an inspector is dumb enough to overlook a defect to buy favor with a realtor, be will quickly go out of business due to claims against his insurance and lawsuits.

And the article you regularly refer to as gospel is written by a reputable inspector, but one who thinks like you and does not like agents. That article attempts to paint any inspector as unethical if they appeal to an agent.

What do you do when an agent actually likes your inspection and calls you for a subsequent inspection? I bet you don’t turn it down do you? Or do agents sense your hatred of them and tear up your card?

Linas makes a good point. This is about gross income though. If you want to increase your gross income don’t be a bare minimum home inspector. Read this
http://www.ahouseonarock.com/bareminimuminspector/

The old Steve Martin line…“One big show, then…goodbye”! :mrgreen:

Back to the OP.
30 inspections a month. Let’s break that down.
We can start with one a day. 30 x 12 is 360. So you get five days off. Two for Thanksgiving, 1 for Christmas, One for July 4th, and one for any other day you choose.
Now, you can’t assume you are going to work every weekend as most people do not want to work weekends and, most Sellers don’t want you in their homes on the weekends. There goes another 104 days. Now you are down to 255 working days, which doesn’t take into consideration, other holidays. Now, you have to do 30 inspections in roughly 21 days. You also can’t control when those inspections get done. One day, you may have to do 3 inspections. Another two days, you may not do any inspections.

Now it all goes back to the fee. At 315 an inspection, as a new inspector, you may be lucky to do 10 inspections. What are the costs of doing those inspections? You have vehicle costs, insurance costs, material costs, software costs, etc. How much does each inspection generate in profit? By the time you factor in all the costs, you may clear $150.00 per inspection. $1,500.00 a month. $18,000.00 for the year in profit. Not a lot of money and certainly not 120K!

When I first started my company, I charged $170.00 an inspection as a vendetta to my former employer who charged $190.00. I paid a roofer and a termite company $30.00 each. That is $110.00 profit so far. I typed my reports back then and did 2 a day for a year on average. I did 440 inspections my first year. After expenses, I made 80 dollars per inspection. I cleared 35K my first year. My second year, I raised my prices to $235.00 and the roofer I used said, you have put on roofs for me, done the estimates, just do the inspection and put it on my form and fax the reports to me. So I did. That was a minus 30 dollars.

Then, the company that was doing the WDO inspections, said, you have done over 3,000 WDO inspections, why don’t we just reinstate your ID card, you do the inspections on our forms, and send them to us and we will follow up on the leads. Another 30 dollars off the gross. Now, I was making roughly 200 dollars profit on each inspection.

I did 500+ inspections that year. Now I was making some real money!
The only problem was it was taking all day to do the inspections and reports.
In year three, along came computers. I got a Toshiba C-100 laptop if I remember correctly, a scanner, and my first software program, Publisher 97.
The guy at Best Buy told me I could just scan in my forms, then in Publisher, add text boxes. Unfortunately, the laptop only had a 100mb hard drive if I recall, and by the time I scanned in the forms, there was little room left. That caused the computer to freeze up.

It was at this point, I wrote my first software program in Publisher. It took a week, but after I got it where I wanted, I started doing the reports on site. I printed them out on a HP Laserjet5 printer, which was a piece of crap, and was replaced with the Laserjet 6 printer, and now, all I had to do was go to the bank at the end of the day.

I was doing 2 a day and now the costs of doing business were much less as I was done by 5:00 every day. I only did 460 inspections that year, but had raised my prices to 265.00. I made a little more money, but, it was much easier.

As I continued, I joined ASHI in 2000, got more training, Joined this org in 2003, went to conferences and, expanded my reports. I was also raising my fees.
In 1998, when I bough our home, I got rid of the office and the land line and transferred it to my cellphone. I had become truly mobile. Everything was also now stored on the computer, back up drive, and discs. No more paper/toner costs, at least for storage. I still had to print the reports.

As I gained more knowledge, my inspections took longer. Realtors began to complain about the time it took to type the reports on site, so, I did them later, at home and then, the next day, hand delivered them to the Realtors office.

Due to the price increase, I also lost some Realtors. By that time, I had begun to focus more on my clients and followups. I started to get referrals from the clients. I also had a mortgage broker call me for an inspection and he passed out my brochures to other brokers at their weekly breakfasts. He also gave my name to an attorney, who after viewing one of my reports, passed my name on to his group. The marketing tree was growing.

At some point, the referrals from clients, mortgage companies and attorneys had pulled even with the Realtors. Eventually, they would overtake the Realtors to the point where I am now, where only 10% of my referrals comes from Realtors.

Last year, I did 184 inspections. On average, each inspection generated $525.00 gross. I have no office. I had no vehicle payments as the Durango was paid off for five of the 8 years I owned it. I still leased it from myself for the business, but that is just money going back and forth. My only business bills were gas, insurance, and some supplies. In actuality, maybe $5,000.00.
That equals roughly a $91,000.00 profit for the year. Luckily, I have an accountant who keeps me informed about the tax laws and what I can deduct. There were plenty of “deductions” which eventually, brought my net profit to $10,000.00. Which is where it usually ends up every year.

During this whole time, I managed to put my wife through college, pay off everything we own, and put a substantial amount of money away in my retirement accounts, my wifes retirement accounts as well as a prepaid college fund and a retirement account for my son.

That is how I did it. Your mileage may vary.

For the new inspectors, you really have no clue how easy you have it. You don’t need an office. With smart phones and computers, most reports can be generated on-site or, very easily at home. You have little supply costs as everything is computerized.

All you need to do is market. And as I said, Market to everyone involved in the real estate transaction. Charge a price that you are comfortable with. Then, find a way to justify that price. Back in the day, I was either the first or one of the first to do the reports onsite. That is why I could charge more because the Clients were impressed with the fact that everyone else said they would have the report in 2-3 days.

I work 2-3 days a week on average. Some weeks, I may only do one inspection. Others, I may do two, but, like last week, one was a new, 5.5 million dollar home, the other an 11 month inspection. A quick $4,000.00 for 2 days work.

The most recent client told the bank to extend the contract to February, from December, as I had just got my shoulder surgery done and I told her it would be at least six weeks until I could do the inspection. That is client loyalty.

The bottom line is to work smart, not hard.

As my roofer said, who is retired in North Carolina riding his Harley around the mountains, he calls me every Christmas just to remind me of that fact, “It is easier to push the pencil, than the hammer”.

There have been several inspectors who have preached the price it low and get all the business model. A majority of them are gone. It is a failing business model because no matter how good you are, if you are cheap, that is what you will be known for and when you decide to raise your prices, those that referred you will just look for the new cheap guy.

Everyone is free to run their business how ever they want.

The above is how I ran mine.

No, Linas is way off base. He assumes that any marketing to agents results in poor inspections. I’ve said many times that this assertion is rediculous and here is the reason. Any inspector who writes a soft report is risking a lawsuit. What inspector would risk his or her business for a few hundred dollars?

Any inspector worth a damn would distance himself from any agent that suggest over-looking a defect. Period.

And I further contend that Linas would not turn down a referral from an agent. If he does a good job, it is very likely that an agent may recommend him on a future deal. Is he “on his knees” if he takes that job? Or does he live by his B.S. and turn it down? I doubt it.

And he performs mold inspections which I contend is more of a conflict. Hire him for an inspection and he might scare you into hundreds more in sampling fees. That is unethical.

Just to be clear about the numbers I used to calculate gross revenue, I based it on the original post. The original post suggested the average price of $315. my average is much higher. But I don’t know the average in that area, so I used that number. 30 inspections per month I think it is a healthy goal. That’s only 7 or 8 inspections per week. For a new inspector, that would be a volume I would hope to achieve at some point, and is what I used when starting.

Thanks Eric well said I hope all Inspectors read this a couple of times .
The industry treated us well and we are now retired .
Sad many do not make enough money to make it too retirement .

Here in Kansas and Missouri, soft reports are the norm. Bushart’s article is right on for our area. Yours may vary. Many inspectors and RE’s here offer several programs that are “free”; warranties, moving services, etc. All are offered because they do not want any liability after the buyer moves in, because they know that the transaction was “shady”.

Offering any free service with any report throws up an automatic red flag, IMO, to any prudent home buyer.

Figure between expenses, taxes, educational fees, licensing fees, gas, vehicle, tools, accounting, you may come away with 20% of your HI revenue.

I only do mold inspections for lending institutions, mold remediation contractors that I regularly refer and for attorneys. I stay away from “my landlord won’t fix the leaking shower pan in the apartment above mine” mold inspection requests. That’s a big red flag for me. I tell them their primary issue is a landlord problem, not a mold problem. My advice to them is “save your money and contact an attorney”. For my home inspection clients, if it’s black and has a water leak associated with it, it’s mold. If your attorney wants lab testing, I will do it…never had to. I discourage lab testing if it’s obviously mold.

Just jeep in mind that you don’t want to be a bare minimum home inspector http://www.ahouseonarock.com/bareminimuminspector/

Fair enough. Just jeep in mind that you don’t want to be a bare minimum home inspector http://www.ahouseonarock.com/bareminimuminspector/

I am not retired yet, Roy! I will do this a while longer until my other ventures take off.
After Wilma hit, my roofer made a fortune and retired in 2007. Speaking of him, if some were paying attention, you will notice that he was using me as a free, non-paid salesman. I alone probably generated at least $200,000.00 in business for him. He did do me a few “favors” along the way though! :wink: A true win/win scenario.

That’s nice, did Nathan do that for you??:p:p
I know you did the sample report on your website, you used photos from 2 different inspections.:wink:

So you confirmed that it is possible to offer ancillary services without being biased, and maintaining high ethical standards. That’s how we should all run our business.

I wrote it myself thank you. If you read it closely, you will see that Nathan would have never written it.