What a Home Inspector Should Expect in Their First Year?
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 other business, the first year can be challenging as you learn about 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 together.
Startup Costs for a New 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 either go up or down depending on the type of schooling and licensing you to pursue, the types of equipment you need to obtain, how much you invest in marketing, insurance premiums, etc. 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 to take 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. Nevertheless, marketing is an essential part of creating awareness and bringing in new customers. To be competitive in your industry, don’t forget that you will probably need to invest in a website and 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.
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+!
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.
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, professional liability 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.