This is a deep-dive behind some data in our latest industry snapshot, in which we analyze trends on the home inspection industry.
Real estate is an industry with boom or bust periods. When times are good, everyone prospers. A flood of people become real estate agents, house flippers, or home inspectors. But there's always a core group that was there before the latest boom, and will still be there after. For these professionals, a thriving industry is a crowded one.
At Spectora, we champion the newcomer who is prepared, professional, and hungry. But we know that some people get into home inspecting thinking that it's easy work, often not serious about building a business. In times like these, the tightening market will churn out the unprepared. And that's a good thing. Here's a couple of data points where tracking:
7% of solo inspectors reported no revenue in September
In September alone, more than 200 solo inspectors reported no revenue, which is a pretty sure sign they are out of business. And that's just in September. Most of these inspectors were new to the industry. If you look at the average number of inspections for new inspectors in 2022, that's 1,195 inspections up for grabs somewhere. New solos averaged 5.7 inspections in 2022. As we head into the winter, more attrition will happen. Bet on it.
Median Inspector Revenue is strong when you account for attrition.
We reported that median September revenue for solo inspectors was $3,500. Many inspectors commented that the number was surprisingly low, and it is. But it's not the full story. When you look at inspectors making more than the median, their revenue was $7,491. In short, most of them are doing more than okay.
If those 49% of solo inspectors making less than $3,500 are in danger of dropping out of the industry, that could mean a whole lot of work that opens up for those who remain.
Why this is good for inspectors that invest during a downturn
Down markets and even recessions have a history of producing fantastic success stories for companies willing to invest as their competitors back off. During the 2008-2011 recession, Structure Home Tech Inspections created what would become a 30 inspector business. They did so during a period where conventional wisdom said real estate was a dead end. By the time the rest of the market was ready to dive back into home buying, they had a huge head start on the home inspection market.
How resilient inspectors can prepare for the upswing
Expand your services
Mold, radon, handyman work, you want to maximize your revenue per inspection. If you're a Spectora user, think about using services like partnerships as an easy way to upsell clients.
Create reoccurring revenue
Tom George of A Precise Home Inspection created a home services division to serve previous clients by scheduling quarterly inspections with a focus on preventative and seasonal maintenance. Check out his reasoning below:
Beef up your marketing
When everyone else tightens up, it pays to broadcast that you're still there. Whether you pay for marketing or now, take advantage of a thinning field of competition.
Find the gaps in your business and fill them
Take a look at your business processes and tighten them up this winter so you're ready to come out of the gate running when the market normalizes.