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How to Start a Home Inspection Business

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Published on January 13, 2022

Updated on September 22, 2022

How to Start a Home Inspection Business

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Fast Facts

Investment range

$3,550 - $7,600

Revenue potential

$100,000 - $250,000 p.a.

Time to build

1 – 3 months

Profit potential

$90,000 - $225,000 p.a.

Industry trend

Growing

Commitment

Flexible

How to Start a Home Inspection Business

Home inspectors protect home buyers by thoroughly inspecting their prospective home for defects and necessary repairs. The US building inspectors industry is valued at an impressive $5 billion. Home inspectors take in about $400 per inspection, so clearly there is money to be made with a home inspection business. You just need a home inspector’s certification and a few tools to get started. 

This does not mean, however, that starting a home inspection business is easy. You’ll have to put in some hours of preparation and research before you launch. Fortunately, you’ve found a handy resource, as this step-by-step has all the facts, tips, and insight that you need to work your way into the home inspection business.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a home inspection business has pros and cons that you should consider before deciding if it’s right for you.

Pros

  • Provide a Valuable Service – Protect home buyers from unexpected expenses
  • Minimal Startup Costs – Get started for little cash out of pocket
  • Inexpensive to Run – Few ongoing expenses
  • Impressive Profit Potential – $400 per inspection is good money

Cons

  • High Risk – Mistakes can lead to lawsuits
  • Education Required – Classes and certification required

Home inspection industry trends

The home inspection industry is heavily impacted by the housing market and flourishes when the real estate market does well. 

Industry size and growth 

  • Industry size and past growth – The US building inspectors market is valued at $5 billion, which reflects an increase of almost 7% per year since 2017.[1]https://www.ibisworld.com/industry-statistics/market-size/building-inspectors-united-states/  
  • Growth forecast – The Bureau of Labor Statistics predicts nearly 15,000 job openings for construction and building inspectors per year through 2030.[2]https://www.bls.gov/ooh/construction-and-extraction/construction-and-building-inspectors.htm
  • Number of businesses – There are more than 30,000 building inspector businesses in the US.[3]https://www.ibisworld.com/industry-statistics/number-of-businesses/building-inspectors-united-states/
  • Number of people employed – The industry employs almost 55,000 people.[4]https://www.ibisworld.com/industry-statistics/employment/building-inspectors-united-states/
home inspection industry size and growth

Trends and challenges

Trends in the home inspection industry include:

  • Home sales are projected to be up almost 7% in 2022, according to Realtor.com, which is good news for the home inspection industry.[5]https://www.realtor.com/research/2022-national-housing-forecast/
  • The pandemic started a trend toward virtual home inspections in which the inspector is physically at the home and the buyer attends through a digital application such as Zoom. This trend is expected to continue into the indefinite future.

The home inspection industry is also facing some challenges including:

  • Changing technology in home elements such as electrical systems and heating and cooling make it necessary for home inspectors to continue their education.
  • Low barriers to entry for home inspection businesses have made the industry extremely competitive.
home inspection industry Trends and Challenges

What kind of people work as building inspectors?

  • Gender – 89% of building inspectors in the US are male, while 11% are female.[6]https://www.zippia.com/building-inspector-jobs/demographics/#gender-statistics
  • Average level of education – 44% of building inspectors hold a bachelor’s degree.[7]https://www.zippia.com/building-inspector-jobs/demographics/#degree-level-types
  • Average age – The average age of an employed building inspector is 51 years old.[8]https://www.zippia.com/building-inspector-jobs/demographics/#age-statistics
home inspection industry demographics

How much does it cost to start a home inspection business?

Startup costs for a home inspection business range from $3,500 to $7,500. The largest expenses are for a website set up, education and certification, and tools. States generally have approved education providers which you can find on your state’s website, and you will have to pass an exam to receive your certification.

You’ll need a handful of items to successfully launch your home inspection business. Here’s a list to get you started:

  • Ladders
  • Digital camera
  • Gas and moisture detectors
  • Circuit tester and voltage sniffer
  • Infrared thermometer
  • Screwdrivers and pliers
Start-up CostsBallpark RangeAverage
Setting up a business name and corportation$150 - $200$175
Licenses and permits$100 - $300$200
Insurance$100 - $300$200
Business cards and brochures$200 - $300$250
Website setup$1,000 - $3,000$2,000
Education and certification$1,500 - $2,500$2,000
Tools such as moisture detectors and ladders$500 - $1,000$750
Total$3,550 - $7,600$5,575

How much can you earn from a home inspection business?

The average price for a home inspection is $400. Your ongoing expenses should be limited to fuel and marketing costs so your profit margin should be about 90%. 

In your first year or two, you could work from home and do 5 inspections per week, bringing in over $100,000 in annual revenue. This would mean more than $90,000 in profit, assuming that 90% margin. As your brand gains recognition, sales could climb to 12 inspections per week. With expected annual revenue of almost a quarter-million dollars, you would make about $225,000.

Home Inspection business earnings forecast

What barriers to entry are there?

There are only a few barriers to entry for a home inspection business. Your biggest challenges will be:

  • You need to complete training and pass an exam
  • It’s a highly competitive market that will require building relationships with realtors

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a home inspection business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Why? Identify an opportunity

Research home inspection businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a home inspector that offers virtual inspections.

You might consider targeting a niche market by specializing in a certain aspect of your industry such as new construction inspections.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

In addition to basic home inspection services you could become certified to do add-on types of inspections such as radon gas testing and termite inspections. 

How much should you charge for home inspection services?

Home inspection prices range from $300 to $450, but generally cost about $400. Your ongoing expenses will be low so you should aim for a profit margin of at least 90%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the price you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Real estate agents usually recommend home inspectors to their buyer clients so your main target market will be realtors. Calling real estate agents personally to build relationships with them is the best way to get business. You can also find them on LinkedIn. 

Where? Choose your business premises

You probably can always run your business from home, but if you do decide to get an office you can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed
home inspection business idea rating

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “inspections” or “home inspections”, boosts SEO
  • Name should allow for expansion, for ex: “Jim’s Bakery” over “Jim’s Cookies”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
  • Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
  • Product and Services: Describe your offerings in detail.
  • Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
  • Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
  • Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
  • Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
  • Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
  • Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
  • Appendix: Include any additional financial or business-related documents.

If you’ve never created a business plan yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer on Fiverr to create a professional business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to home inspection businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your home inspection business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Personal funds or family and friends funding are probably the best way to finance your startup costs since the costs are relatively low.

Step 8: Apply for Licenses/Permits

Starting a home inspection business requires obtaining a number of licenses and permits from local, state, and federal governments. You will need a home inspector’s license or certification from your state. Education and other requirements vary by state, so check with your state government to find out what you need.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your home inspection business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You can use industry-specific software, such as Buildium, 3D Inspection, or Spectora, to manage your scheduling, pricing, billing, relationships, and inspection reports.

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

Some of your business will come from online visitors, but still, you should invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products: 

  • Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area. 
  • Instagram: Same benefits as Facebook but with different target audiences.
  • Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Now”. This can sharply increase purchases.
  • Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers. 

Kickstart Marketing

Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include: 

  • Signage – Put up eye-catching signage at your office and website.
  • In-Person Sales – Offer your services directly to realtors.
  • Sponsor events – You can pay to be a sponsor at events that are relevant to your target market.
  • Post a video – Post a video about your services. Try using humor and maybe it will go viral!
  • Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal. 
  • Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
  • Seek out referrals – Offer incentives to generate customer referrals to new clients. 
  • Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
  • Pay–per-click marketing – Use Google AdWords to come up faster from searches. Research your keywords first.
  • Do a webinar – Share your expertise online with a video seminar.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your home inspection business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your home inspection business could be: 

  • All your home inspections in one day including radon and termites
  • Extended hours home inspections on your time
  • Virtual home inspections to protect your health and home
unique selling proposition

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a home inspection business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in home inspection for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in home inspection. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees, and you may just continue to do business that way. If your business grows to a large level though, you may want to hire employees. Potential positions for a home inspection business would include:

  • Home Inspectors – perform inspections, create reports
  • General Manager – scheduling, staff management, accounting
  • Marketing Lead – SEO strategies, social media marketing, networking with realtors

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Start Making Money!

Home inspection companies perform valuable services for customers that can save them thousands of dollars in repair costs. Home inspection is a huge industry valued at a remarkable $5 billion in the US, and as the real estate market booms, it will continue to grow. 

A home inspection business can provide you with an excellent steady income and, at the same time, allow you to help home buyers with the largest purchases of their lives. Now that you’ve started your educational process and know what is required, you’re on your way to becoming a home inspection entrepreneur! 

Home Inspection Business FAQs

How much does it cost to start a home inspection business?

Startup costs are low for a home inspection business. You can launch your business for as little as $3,500. You need education and certification, a website, and some basic tools and you’re good to go.

How much can I make with a home inspection business?

The average price for a home inspection is $400, so if you do 10 inspections a week, you’re bringing in $4,000 a week. Your expenses will be low, so most of that cash stays in your pocket!

What licenses do I need to start a home inspection business?

You need to be certified or licensed as a home inspector in your state. Requirements for training and the process to become certified vary by state. You will also need business licenses and permits at the state and local levels, so check with your local governments for requirements.

How can I get clients for my home inspection business?

Realtors usually recommend home inspectors to their home buyer clients, so you should try to build relationships with real estate agents to get referrals. You can call them directly, go to places where you can network with realtors, or connect with them on LinkedIn.