A Home inspection business can be a lucrative opportunity for anyone who understands its ins and outs. The business entails assessing the seller’s home’s physical structure from the foundation to the roof to identify issues that are likely to affect the property’s price.
The inspector then drafts a report and submits it to the buyer for a fee. The buyer subsequently uses the report to decide whether to buy the property at the agreed price or negotiate for a lower price.
The property sellers may also need the inspection report to make improvements that may increase the value of their property.
Given that the number of home sales in the US has been increasing since 2008, it is evident that there has been a progressive increase in the number of home inspection opportunities. So, how can you utilize these opportunities?
How To Start a Home Inspection Business
Without further ado, below is a step-by-step guide on how you can start a home inspection business and capitalize on these opportunities.
Step-1: Prepare For the Home Inspection Business
Starting a home inspection business is not an easy job. You need to develop the business goals, understand your target audience, and analyze the market. Also, you need to assemble the startup capital, analyze the competition and then strategize on how to stand out in it.
An earlier preparation for a startup can help you identify the possible startup challenges and make it easy for you to penetrate the market. Below are the various steps you can take to prepare for the home inspection business.
[a] Get A Home Inspection Training
The home inspection entails a careful analysis of the foundation, the walls, the roof, plumbing system, drainage system, electrical wiring, etc. Going for training can help you understand every inspection element and what to look for in each of them.
Additionally, the certification that you get after training can add your credibility in the eyes of potential clients and partners. Examples of ways in which you can get certified as a contractor include:
[i] Taking In-Person Training
Though a significant percentage of the home inspection process is practical, going for class training can help familiarize yourself with all the complex concepts used in home inspection. It can also equip you with alternative and effective procedures for executing various tasks in-home inspection.
To make the most out of it, you need to enroll for the course in a well-established institution.
[ii] Take Online Home Inspection Classes
If you belong to the construction industry, you may only need some little knowledge in addition to tweak your home inspection abilities. And, in that case, an online home inspection class during your free time may be enough to acquaint you with the key home inspection principles.
All you need is a smart device with an internet connection to facilitate your virtual learning.
As mentioned earlier, a home inspection is more practical, and the best way to nail your skills is by learning by doing it. So, after familiarizing yourself with the basic concepts and principles from class/ online training, you need to supplement the skills gained with practical training.
Since you are new to the home inspection industry, the best way to hone your skills is by working under an expert. That way, you will learn the key areas that need to be inspected in a home to ensure its safety.
Also, knowing the critical inspection areas will help secure your client from the loss resulting from doing home repairs, hence building your reputation.
[b] Investigate Other Home Inspection Businesses
Business is all about copying what the leaders in the market are doing and constantly innovating to remain relevant in the market. Therefore, as a new entrant to the market, you need to copy or improve what other successful businesses are doing; otherwise, customers won’t see the need to convert to your business.
The inspection will also help you study the competition. During your visits, do not hesitate to ask your potential competitors what home inspection services they offer to their customers and their pricing strategy.
Also, you need to throw a curious eye on their marketing strategy, their popularity, and the quality of tools and equipment they use to prepare the inspection report.
If some home inspection firms are more popular in the locality than others, investigate the reason for their popularity and assess whether you can copy the same.
In a nutshell, you should collect all information about your competitors and strategize on how to stay on top of them.
Step-2: Draft The Business Plan
After collecting all necessary information about a home inspection business, you need to decide on things like the name of your business, your business goals, your target customers, business size, implementation strategies, and many other core business aspects.
A business plan will help you summarize your business aspects into a standard booklet for quick referencing. It will also aid you in securing external financing from lenders and private investors. The most critical components that you need to include in your business plan include:
[a] The Company Description
The company description section should outline the key aspects of your home inspection business, such as the business name, location, and business size. It also contains the type of business structure, mission statement, vision statement, and business objectives.
In other words, it tells potential partners and lenders about the vision and direction of the company so that they gain a clear impression of what you are. It comes after the executive summary.
[b] The Market Analysis
The market analysis section of the business plan comes after the products and services section. It acts as proof that there is a gap in the market that you can utilize through your business. In your case, you should provide a foundation on which you will lay your sales and marketing provide:
[i] The Industry Analysis
It should have a clear outline of the industry environment where you will be competing
[ii] The Competitive Analysis
It should contain a list of your competitors with their strengths and weaknesses
[iii] The Target Market Analysis
should identify the potential customers that you intend to serve in the market. It should also contain the strengths, weaknesses, and risks of starting a home in section business, among other data.
[c] The Organization And Management Section
This is a summary of the information about your company structure and team.
It usually follows the market analysis section in the business plan and will only be essential if you intend to form a partnership or a multimember limited liability company.
In other words, you don’t have to include the organization and management section if you are the sole owner of the home inspection business
[d] The Financial Section
The financial section is the most important section of your plan, especially if you intend to finance your business through external financing. It should outline all your unpaid debts, your financial projections in the next five years, and any other relevant financial data.
Note that you should be sincere in this section as investors have to verify the information you have provided before financing your business.
The other components of your home inspection business plan should include the marketing and sales section, equity and funding sections, and the product/service section.
Step-3: Find Business Financing
Like any other business, you will need money to buy the necessary equipment like quality cameras, computer accessories, transport vehicles, and other vital tools.
You can finance your business in multiple ways, including a bank loan, partnering with a venture capitalist, small business association loans, etc.
However, most investors will only finance you if you have a good credit rating.
Step-4: Find A Strategic Location For Your Office
Typically, you will be traveling to homes and estates to offer your services. That means you store your equipment at your place during the start-ups when the business is just small. However, you may not use your home forever.
As your home inspection business grows, you will need an operating center where the stakeholders in your business, including your employees, can operate comfortably. That is why you need a business office to operate from.
Since you aim to publicize your business, you should locate it at a place where the general public can easily access it, like a residential area or a shopping center.
However, you may find yourself in trouble if you are not conversant with your state’s zoning regulations. To avoid this, you can hire a city planner or a real estate agent to aid in looking for a good location.
Step-5: Collect The Necessary Licenses And Permits
Different states have different regulatory bodies and requirements for the licensure and permission of home inspection businesses. For instance, in Florida, home inspectors are regulated by the Florida Department of Business and Professional Regulation. And to qualify for the license, you must:
- Have spent 120 hours-training from an approved trainer
- Pass the FABI, CI-HPI, NHIE, InterNACHI exams
- Pass the background check
- Possess liability insurance
- And pay a licensing fee, among other requirements
Some other states like Illinois have an age limit, while others like Georgia and Idaho are unregulated.
As you can see, the licensing requirements differ from one state to another. That said, you should check with your state requirements to ensure conformity.
Step-6: Get The Best Home Inspection Tools And Equipment
Now that you have secured the startup capital, leased an office, and obtained the necessary documentation, it’s time to get the right tools to kick start your home inspection business. Examples of the home inspection tools you need to acquire include:
A spectroscope is an abnormally tall telescoping camera that is ideal for inspecting and taking rooftop pictures.
[ii] Tool Vest
Typically, you will need to carry various tools like infrared thermometers, flashlights, electrical testers, and many more for inspecting various components in a home. Wearing a tool vest will allow you to pocket most of the above tools in the vest and carry them without struggle. It is more convenient.
[iii] Electrical Gloves
When conducting your inspection, you may come across faulty electric lines or appliances that may risk your electrocution. It is thus safe to wear electrical gloves to cushion you against electric shock.
It is recommended that all home inspectors wear electric gloves that meet ASTM D-120/EIC903 specifications for safety purposes, and so should you.
[iv] Telescoping Adjustable Mirrors
Adjustable telescoping mirrors come in handy when inspecting inaccessible areas such as stucco and behind the siding to check any house wrap.
[v] Flash Lights
Flashlights will help you inspect dark areas and take photos of the same. For convenience purposes, you should carry two or more flashlights to balance the light in the scene for photography purposes.
While doing the inspections, you may come across particulates such as asbestos, dust, and other materials that may be hazardous to your health when inhaled. A respirator can prevent you from inhaling such particulates keep you safe throughout the inspection period.
The other home inspection tools that you may add to your toolkit include protective glasses, electrical testers, AFCI/ GFCI testers, voltage indicator, moisture meters, carbon monoxide analyzer, continuous radon monitors, and so on.
Step-7: Start The Home Inspection Business
Now that you have the right equipment, skills, licenses, and other vital requirements, you can now start your home inspection business. You need to commit your time and other resources to make your home inspection business successful at this stage.
Step-8: Publicize Your Business
You need to inform the general public about your business and how you can help them secure the best home deals. You can advertise your business through billboards, burners, arranging interviews with your local broadcaster, TV channel, and so on.
Another way to convert more customers to your business is by conducting your business online. For effectiveness, you need a business website where customers can access your services online. You can also get insights on how to promote your business from various online sites.
You may like the following business articles:
- Should I Start A Business Or Buy A New House?
- Starting a Business or Investing in Stocks
- Will starting a business impact your personal life?
- Starting a Business While Working Full Time
- What to know before investing in a business
A home inspection business can be a lucrative opportunity. To get the most out of it, you need to understand the ins and outs of starting and operating the business. And this is what our guide is all about. Kindly read through it and try to implement the guidelines provided. All the best.
Bijay is an entrepreneur and start-up founder having more than 14 years of IT industry experience. He is the co-founder of TSInfo Technologies, a SharePoint development company.
A dedicated professional and very passionate about public speaking and also wrote thousands of technical blogs in various technologies. He also wrote a lots of blogs on entrepreneurship, investment, startup, business, manage money tips, etc.