Do you want to start a home inspection business? If yes you have landed at the right place. Here in this article, we will guide you through all the steps to follow in starting a successful home inspection company including costs, legalities, equipment needed, and much more.
You must be aware of the business of inspecting homes and the people who do the work. If you are not, first let us understand what actually home inspection is all about.
What is Home Inspection?
The home inspection business essentially includes the research and preparation of a report on the condition of a home, or real estate.
People who are keen on buying a home or real estate often employ a home inspection team to take note of the property and provide a realistic report on it. This helps them in bargaining prices with the sellers.
The sellers also take the assistance of a home inspection team to prepare a report on the specified property so that there is an authentic report to bargain on. This inspection activity is also an important part of the real estate industry.
Now you can very well understand the importance of the home inspection business. You can start this business and earn a good income from it. The success of the business majorly depends on teamwork. Hence you will need to employ others in your team.
The home inspection business has bright prospects. According to Statista, the revenue generated from this business is growing since 2021 and will reach approximately 3.417,9 million U.S. Dollars by 2024.
As per the latest study by the American Society of Home Inspectors (ASHI), it is observed that for more than 90% of home sales, a home inspection is mandatory.
It is without saying, to start this business, you need to follow certain steps. Let’s check out below:
13 Steps to Start a Home Inspection Business
1. Get Qualified
To become a certified home inspector, you need to get yourself qualified for the job. The rules of the course and certification vary in different states. You have to know the respective rules of the state where you want to do your home inspection business and get enrolled.
After successful completion of the course, you will get a certification. It is important for the credibility of your business as well as the certificates you issue. Moreover, you have to continue your education and upgrade your skills as an inspector.
2. Research and Area of Business
Choosing an area for your home inspection business is important. Your native area will give you an added advantage. However, you have to research the feasibility of your business in that area. Collect data about properties and their dealings along with the number of competitors in the area. Also, get to know about the economic affordability of the people.
3. Create a Business Plan
After you have completed your research, it is time for you to write the business plan for your home inspection business. Give all the details of your business in the business plan. It should include
- Vision and mission
- Importance of home inspection business
- The prospects of this business
- Your Qualification
- What tools are required for this business?
- How much money do you need to start the business
- Marketing Plans
- How much profit can you get from this business?
Take the help of experts in writing the business plan. Be accurate and authentic in case of estimates as much as you can.
4. Select a Business Name
Find a suitable name for your home inspection business. Keep in mind, that the name should be related to your business and it must be serious. You will also need to get the domain in the name of the business. You have to change the name in case the domain is not available. Hence, keep some alternative names handy.
5. Form a Legal Entity
Make your home inspection business a legal entity by following the respective legal formalities. You can form a sole proprietorship, partnership, LLC, C Corp, or S Corp according to your choice and convenience.
6. Procure Licenses and Permits
You will need several licenses and permits to conduct your home inspection business. The license and permits vary according to the state. You have to enquire at the town, city, or county office for the correct information. Getting the license and permits is very important for the sake of hassle-free business.
7. Tax Registration
Register your home inspection business for the applicable taxes. Also, get the EIN which is also mandatory. Apart from the income tax and self-employment taxes, you may have to pay other taxes as per the rules of a particular state.
8. Insurance Coverage
Get the right insurance for your property inspection business. General liability insurance, Workers’ Compensation Insurance, Professional Liability Insurance, Property Damage Insurance, and Automobile Insurance are some of the common insurances you will need for this business.
9. Open a Business Bank Account
Open a bank account in the name of your home inspection business. Try to get a business credit card for your business to avail of credit facilities.
10. Buy Tools and Software
This type of business is mostly carried out on the field, or at the site. To inspect and assess the standard and security of the building or apartment, you will need certain tools. These tools also ensure the safety and security of the inspector. The commonly used tools include
- Electrical Testers of different varieties
- Voltage indicator
- Half-face and full-face respirators
- Combustible-gas detector
- Carbon monoxide analyzer
- Moisture Meter
- Infrared thermometer
- Infrared camera
- Telescoping magnets
- Safety glasses
- Smoke pen
- Telescoping ladders
- Electrical gloves
- High-traction boots
You will also need a computer or laptop, an internet connection, and specialized software for the home inspection. This software helps you in tracking the inspector, prepare inspection reports, storing data about clients, etc. Home Inspector Pro, Horizon, and Inspector Nexus are some of the well-known software you can consider buying.
11. Office and Employees
You can start your home inspection business from home. However, you will need an office space with sitting arrangements, desks, computers, printers, fax machines, etc.
You will also need staff for your business. These include trained inspectors, office staff, accountants, etc. A sniffer dog is also a requirement for the home inspection business.
12. Fix the Rates of Home Inspection Services
Rates are dependent on the size, condition, and complexities of the property. Standard inspection fees range between $350 and $500. For special termite inspections, the rates are $375, and for more complicated inspections like finding out the presence of radon gas, etc, the fees may go up to $800-$1000. The more qualified and equipped you are, the more you can charge your clients.
13. Have a Marketing Plan
Having a well-thought-out marketing plan is critical to establishing a successful home inspection business. You have to establish your name as well as goodwill in the market and create an edge over your competitors. Follow these methods as your marketing strategies.
a) Create a Website
Design a user-friendly and informative website for your home inspection company. Give information about your credentials, the job done, and rates on the website. Share the link to your website in ads and social media handles.
b) Create a Logo
It is essential to make a catchy and eye-grabbing logo for your home inspection business. The logo not only creates a strong first impression but also acts as one of the most effective brand identifiers of your home inspection company. Check our detailed guide on how to create a logo and learn more.
c) Publish Ads
Give ads about your home inspection company in local newspapers, magazines, radio, TV, etc.
Enlist the name of your home inspection business in local directories, websites, and yellow pages that contain information on home inspection-related businesses.
e) Display & Distribution
Use posters, banners, hoardings, and glow signs at prominent places in the area. Also, distribute pamphlets and flyers to potential clients. Make Colorful brochures and distribute them to different offices and individuals.
f) Explore Social Media
Use social media for the publicity of your home inspection business. Create pages in the name of your home inspection business on the social media handles and keep them updated. Share the link to your website on these pages.
g) Digital Ads
Give ads in digital media as well as paid ads on social media.
Grow regular networking with various estate agents and contractors. Also, give presentations at various trade fairs and conferences. Offer free service as and when required for publicity of your home inspection business.
Keep good contact with your potential clients, i.e. homeowners, home buyers, sellers, real estate agents, contractors, and mortgage agents. Personal visits and regular contacts will give you a lot of mileage.
i) E-Mail Marketing
Send e-mails to prospective clients regularly with your contact details. You have to create a resourceful database for this.
Frequently Asked Questions
Is Home Inspection Business Profitable?
The home inspection business is profitable. Profit depends on the scale of your operations and how long you work. On Average, if you work full-time in this business, you can earn between $70,000 and $100,000 annually. After deducting all the expenses and payments, you can get 40-50% profit. This is quite an impressive figure. If you can expand your business and open branches in other places, you will be able to get more profit.
How Much Money do you need to start Home Inspection Business?
Start-up costs for a home inspection business range between $15000 and $35000. It includes licenses and permits costs, taxes, insurance premiums, software, Office furniture, salaries, tools, training cost, marketing expenses, etc.
The home inspection business is a profit-making one and has bright prospects. Hence you can get benefited from this business.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their businesses.