Additional Inspector Pay

Hello Everyone,

I have seen some articles regarding this but they are a little old.

I am debating on training another inspector and have him start picking up some inspections in a different county close to mine. However, I don’t know how well this will take off right away. I plan on continuing the county that I currently cover. I am wondering what do I pay him per inspection, report and all? My starting fee is $305. I also offer different packages. I was debating on paying him a straight fee for the basic home inspection, then perhaps a commission if they can up sale into the higher package. I also planned on using them as a subcontractor to begin with.

Any suggestions?

Thanks

Are you a franchisee or a single member LLC? If the former and you have a good amount of overhead, you might want to pay 30-40% of the total fee for whatever they’re certified for. If the latter and you have little overhead, you might want to go 40-50%. Some inspectors start their workers at a certain percentage and give a 2% raise each year for five years till they max out at 10% more than they started. But that’s just one example of many.

There are countless ways to do it, but it depends largely on your expenses, what they’re capable of doing, and other factors. Ultimately, your main concern is still making money (net income) while knowing you can trust your other inspector(s) to go solo.

I am a single member LLC.

My overhead is about $250 a month right now. I have seen in past post where some will pay a additional inspector 15%. However, I don’t know if I am understanding this right but if I charge $305 for an inspection, then I am only paying my inspector $45.75 to perform the inspection. Which typically with a report and all takes 5 hours so that would only be $9.15 an hour which seems really low. Am I looking at this the wrong way perhaps?

15% may be the rate for a franchisee who has a ton of expense but is far too low, IMO, if you want to incentivize and keep good inspectors. If you’re referring to their rate for them doing all the work, 15% isn’t going to keep anyone onboard. You’re overhead is also very low at that rate, so paying them more probably wouldn’t break the bank.

I’m also a single member LLC and pay my inspectors 50%, plus a 2% annual raise over 5 years, till they max out at 60%. I couldn’t do that if I were part of a franchise, though, and my franchise friends have told me they pay anywhere from 30-40% starting and maybe 40-50% as a cap.

Hope that helps. Some on here may completely disagree with those numbers, but it’s what I’ve experienced and heard from other inspectors.

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That does help a ton, appreciate the help! Just wondering also, I am assuming you hire them as subcontractors and not actual employees?

Yes, although a lot of people go the employee route. There are pros and cons to each, but my guys manage their own areas, pay for all their own training, tools, etc, and are true independent contractors. I did a lot of research and spent a lot of time talking with my CPA and others before going that route, and that’s what I ended up deciding to do. There are pretty strict guidelines, though, so you have to be sure you plan things out well before you start bringing anyone onboard.

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Thank you! This has definitely been a learning experience.

There are severe penalties if you misclassify employees as subcontractors and a lot of criteria embedded in the definition. If you go the subcontractor route, make damn sure that you meet those criteria. Most HI arrangements won’t

What about insurance? Will your General liability and Errors and omissions transfer to his inspections?