How To Start A Home Inspection Business?

  1. Home
  2. Home Inspector Information
  3. How To Start A Home Inspection Business?

window issues during home inspection

Being a home inspector can mean working for a home inspection company or being your own boss. Flexible hours, autonomy, and good pay are all part of the package. But to reap those benefits, you need to have the right skills and qualifications to do the job well. This article will explain more about how to start a home inspection business and become a home inspector.

Do You Need A Degree To Be A Home Inspector?

If you want to learn how to become a home inspector, a special degree is not necessary, nor is it required by any state to perform home inspections. You will need a high school diploma, however, an associates or bachelor’s degree in architecture or engineering is a plus. A knowledge of architecture or engineering is helpful because these principles are used to evaluate the systems and structure of the home or building to determine if there are defects. Also, you may be asked or decide to review building or property documents, since they may give you a greater understanding of the workings and structure of the home.

What Certifications Do You Need To Become A Home Inspector?

Doing research on your state’s licensing and certification requirements is critical if you want to know how to become a home inspector. There is no national standard and every state is different. Many home inspector membership organizations will offer their own training courses, certifications, and Standards of Practice. Unless you are clear on what is required by your state, you may be making an investment that does not meet your state’s criteria for how to become a home inspector. Thirty-five states require a home inspector to be licensed and certified. Many require taking the National Home Inspector Examination or belonging to a membership organization that meets certain minimum requirements.

What Home Inspection Insurance Will I Need?

Even the most experienced home inspector is not immune to making a mistake. Mistakes are especially more likely to happen in your first year of inspecting, so adequate insurance is extremely important. Safeguard your home inspection business from going under before it has a chance to take off.

New home inspectors should consider carrying errors and omissions insurance, and general liability insurance to protect their company. Beginning your home inspection business can be stressful, speaking with a home inspection insurance agency can help you decide what is the best option for you. EliteMGA will provide a free quote and breakdown of what insurance is the best fit for your needs. That way you can sleep easy knowing you’re properly protected.

State by State Insurance Requirement

Insurance is required by most states to protect consumers in the event that an error, omission, or unforeseen issue occurs. Having the right insurance coverage in case someone brings a claim against you is great protection for your business and can bring you much-needed peace of mind. If you want to know how to become a home inspector in your state, do your research because every state has different criteria. Learn what insurance your state requires to become a home inspector. EliteMGA’s knowledgeable team will help you choose insurance that meets your state’s requirements as well as the needs of your business.

What Equipment do you Need to be a Home Inspector?

With every profession, there are certain tools and equipment you need to operate effectively. Here is a list of the most important ones if you are wondering how to become a home inspector:

  • Microsoft Excel, Word for data entry
  • Electrical testers
  • Digital camera
  • Inspection report software (Spectra, HomeGauge, Horizon)
  • Safety equipment such as flashlights, boots, and more.

drone camera

What are the Startup Costs for a Home Inspection Business?

Like most startup companies, a home inspection business requires new home inspectors to provide startup costs to get their business off the ground. That amount will vary depending on services, location, size of the company, etc. It can vary depending on the type of schooling and licensing you pursue, the types of equipment you need to obtain, how much you invest in marketing, insurance premiums, etc. According to US Small Business Administration, “Some may be able to launch with roughly $3,000 in startup costs, while others might come closer to $25,000.” Regardless of how much you spend, the key is taking the time to create a budget and plan accordingly so that your business can be successful. Some ideas of what your startup funds should go towards include:

  • Testing and Licensing: Perhaps the most basic question you need to answer will be what services will you offer? You’ll want to be able to show your customers that you hold adequate training and credentials. If your budget is tight, you can always get the State-minimum certifications and increase your repertoire later with continuing education.
    • Plan to spend between $500-$3,500 in this category
  • Equipment and Organizational Tools: Every home inspector will need to have an arsenal of tools in order to perform a proper home inspection. In addition to the physical tools, having proper organizational tools will help keep track of invoices, schedules, billing, and pricing.
    • Plan on spending between $1,100-$3,000 on both equipment and organizational software.
  • Marketing: Marketing is an optional and flexible expense during the first year of your home inspection business. A lot of factors will determine your budget such as how competitive your market is and what campaigns you want to invest in. Marketing is an essential part of creating awareness and bringing in new customers. To be competitive in your industry, do not forget that you will probably need to invest in a website as well as digital marketing.
    • Plan on a monthly budget of $100-$500+ on marketing initiatives.
  • Membership Fees: Joining industry organizations can be a great selling point to customers. They are a great way to continue to grow and build your foundation of knowledge for your home inspection business. Most importantly, an association like InterNACHI has a database for certified home inspectors which will advertise you to local customers; this will help procure some of the most qualified leads you can get.
    • Plan on spending between $200-$500 per year in this category
  • Insurance Policies: Insurance is a key tool in protecting your home inspection business during its first year, and your customers will also want to make sure you are properly insured. Legal defense costs and damages could devastate an uninsured home inspector business. It is important to invest in insurance for home inspectors, including errors and omissions (E&O) insurance and general liability insurance coverages.
    • E&O insurance can be tailored to your specific needs and services, annual deductible options range from $1,500 to $10,000 and liability limits range from $100,000 to exceed $1,000,000. Learn more and request a free EliteMGA quote.

What a Home Inspector Should Expect in Their First Year?

First Year Home Inspector Business Expectations

Becoming a home inspector is a rewarding and lucrative career – especially for individuals who enjoy being their own boss and working closely with families preparing to buy or sell their home. However, like any business, the first year can be challenging as you learn the ins and outs of becoming a home inspector.

While having some industry experience – such as a prior career in construction or contracting – can be beneficial in overcoming the initial learning curve, it is not a requirement to begin a new career in home inspection. During your first year in the home inspection business, you can expect to increase your knowledge as you experience new obstacles, learn how to resolve those challenges, and broaden your understanding of how the systems within a homework group work together.

What is a Home Inspector’s Job Description?

A home inspector is hired to evaluate residential properties to determine if the structure and systems of the home comply with regulations and are free from defects, damages, and hazards. Testing systems, creating reports of findings, and communicating the results with homeowners and other stakeholders is all part of the job. You should be knowledgeable, detail-oriented, thorough, and organized if you want to learn how to become a home inspector because your findings will help the homeowner make one of the biggest financial and personal decisions of their life.

How Much Does a Home Inspector Make in Their First Year Inspecting?

Your first year with your new home inspection business will probably be the most difficult. Financially, it is typically the year that new home inspectors make the least amount of money. Obviously, having fewer clients and referrals is the main reason but new home inspectors also typically charge a bit less per inspection. First-year home inspectors make an average of $50,000. In the right location, the annual salary of an experienced home inspector could average $90,000+!

Do Home Inspectors Make Good Money?

There’s good news if you are learning how to become a home inspector. According to the Bureau of Labor Statistics, earnings for construction and building inspectors (which include home inspectors) are on the rise, with a 10% growth expected through 2026. Right now, the top 10% of home inspectors are making more than $76,000 annually according to PayScale, with the median home inspector earning $46,000. As regulators and the industry increase focus on home safety, the future looks bright for demand and steady work, so it’s a great time to learn how to become a home inspector. Learn how to market yourself and grow your home inspection business.

Read some more tips on how to grow your home inspector business.

How Many Home Inspections Can My Home Inspection Business Expect in the First Year?

During the first year of your new home inspection business, you may not get as many leads as you’d like. It is always an ongoing process to grow your customer base and get your name out in the industry as a reputable home inspection business. Established home inspectors can expect about 300 inspections per year. However, in your first year inspecting you should expect about 130 inspections.

The key is to stay patient, invest in marketing to get your name out there and encourage your customers to share their experience and refer your home inspection business. To build your future prospects, offer to stay in contact with the clients after the inspection, make connections with realtors, offer discounts, etc. Over time, the number of yearly inspections will grow.

At EliteMGA, we have been serving home inspectors for more than 15 years. We are the only insurance entity dedicated specifically to home inspectors and that has its own captive carrier, EliteRE. We can serve you better, faster, and at a lower cost. Contact our experienced team if you want to know how to become a home inspector and the insurance requirements in your state.

Note: This post was originally posted on August 3, 2021, and updated on February 2, 2023