Home Inspector Tool Box Part 2 – Tools That Increase Revenue
In a previous article I wrote a quite exhaustive article and list on the essential and recommended tools that I feel each home inspector should have in his/her tool box. I discussed what the inspectors in my company carry with them; but there are tools my company uses that I did not discuss previously. These tools are largely responsible for transforming the face of my inspection company and play a big part in the very high inspection fees we charge and that our clients happily pay. So let’s get started discussing tools that can significantly increase revenue for a home inspector.
Clients happy to pay more??? In the preceding paragraph I made a statement that is the nemesis of most any home inspector; “very high inspection fees we charge and that our clients happily pay”. I have heard objections from just about every angle and viewpoint expressing frustrations that “nobody is willing to pay for that!”, “knowledgeable home inspectors are not who make the money; those with people skills do!”, “referring realtors won’t stand for prices like that!”; and yes, there has to be an exclamation mark at the end of the statement or it wouldn’t be a home inspector saying it. Well, in this article, I will explain the role certain tools have played in helping me surmount these types of difficulties and find quite the opposite results; clients that are looking for someone who charges more.
Tools that increase revenue.
Let’s get a little deeper into the tool box of Michael Gaurnier, ACI, Inc. What tools will significantly increase an inspectors revenue and be worth the time and investment? A guiding principle to pay attention to in selecting tools and services is this: is there a publicly known conflict of interest with those that usually provide this service? If there is public awareness regarding such a conflict in any inspection or testing service, this generally provides an opportunity for home inspectors. Why? Well why do home inspectors exist in the first place? – To resolve conflicts in interest. The following list of tools and their corresponding services brings an additional $100 on almost every inspection we perform; $400 to 50-60% of our inspections; and $1,600 additional to 15% of our inspections. To put this in perspective, our average inspection fee across the board ranges from $850 to $1,200 per inspection ranging from a simple re-inspection to a commercial building inspection.
Revenue increasing tool #1. The right education and certifications. I cannot start speaking about hardware without mentioning this first. Are you going to choose that home inspector school that is $499, $4,999, or $0.00? an inspector’s mentality and approach to this all important question that is simply brushed under the carpet by so many home inspectors will almost completely influence the inspector’s approach to investing in tools and the education necessary to properly operate those tools. There are many online inspection schools for the $499 price range that do provide good information; I know of one home inspector association that provides free education and what I consider totally artificial certifications all for free once one pays for the price of annual membership. This association also provides very good and helpful education. And then there are only a couple home inspector schools out there that cost a few thousand dollars. Rather than describing the education as very good and helpful, I’d describe the education provided by these more expensive schools as very difficult and challenging, requiring quite a bit of determination to get through. Quite a lot of expense, and they do NOT make the home inspection profession sound easy; can you tell where I’m going with this? Which one is providing the prospective new home inspector with an accurate assessment of what it actually takes to succeed as a home inspector? Which one will be prepared for success? Here is the “tool” (guiding principle) I recommend: The more one invests in “real” education, even spending a far higher price for such, will have the competency and confidence to charge higher fees and deliver a much better service. Though there are a few very good, higher cost schools out there; my number one recommendation is The ASHI School (and no, unfortunately I’m receiving no kick-back for naming them). In a future article directly discussing how to earn higher revenue, I’ll discuss the even more sensitive questions “which association should I choose?”.
Revenue increasing tool #2. Thermal imaging cameras. For me this was the first large investment tool where I took the plunge and purchased it. Now many inspectors have purchased these, and no they are not earning higher revenue. Well, this anomaly is why the preceding paragraph was written (go back and read it…). How to use an IR camera as one of the tools that increase revenue:
- Purchase a professional grade IR camera. In my assessment, one can purchase nothing less than the Flir E6 if one is going to use it as a “real” tool. My company uses the Flir E8 as a minimum but we mainly use the Exx models. There are other manufacturers that make high quality cameras; the above mentioned models can be used as a comparison in choosing. At some point more than one camera needs to be purchased as demand grows and tools are in need of repair.
- Obtain “real” (hopefully you’re seeing a theme here) education and certification in using this equipment. I recommend at minimum the Monroe Infrared CRT training course and certification. Beyond this I recommend becoming Level I Certified by ITC (anything beyond level 1 doesn’t have much application for home inspectors). Also, BEWARE, some of these providers of low cost and free courses try to mislead by labeling their course “Level 1”. Again, the real thing costs about $2,000 and that is real education that converts to “competency and confidence to charge higher fees and deliver a much better service”.
- Do not offer additional services for free. This is a basic principle of high earning home inspectors. Now, if you’ve invests thousands of dollars in equipment and becoming highly educated and an authority on the service, you will be far less inclined to offer this for free. My company charges a minimum of $70 as an add-on service to a home inspection and a minimum of $495 for a stand alone thermal imaging scan of a building. At this rate, I paid off my first $8,000 investment within 6 months and after that, this service has been revenue producing. Remember, this is not a toy, so if the client doesn’t pay, the camera doesn’t come out of its box. One of my inspectors got us into some trouble using his camera in an unofficial capacity and then not finding deficiencies he should have found when using the camera.
Revenue increasing tool #3. Sewer video cameras. I think for many inspectors, this would be the next big purchase. Depending on the area of the country, these can bring in quite a bit of revenue but they do require some heavy lifting. In using this equipment, one might want to consider getting another inspector or qualified helper on inspections. This can consume an extra 45 minutes to an hour on-site and requires some cleaning and a vehicle to safely transport in a sanitary way. This cameras tend to cost in the range of $7,000 – $12,000. I strongly recommend the Ridgid Seesnake model cameras though I’m sure there are others that can work well; but we’ve waisted a lot of money until finding the Ridgid cameras. Why might these be a good piece of equipment for you?
- Most areas of the country have a significant amount of homes with older metal or clay sewer piping. Once there is a more than likely chance that the new buyer will be spending at least a few thousand dollars on sewer repair, they become very willing to pay anywhere from $99 to $500 to have this inspected.
- Only basic education and a very minor certification are available for this service; but this is adequate along with some consultation with plumbers or sewer contractors. I would recommend using a contractor as a back up sewer inspector and for advice.
- Many realtors and clients will use your service because they know they can take care of this without hassle and right at the start.
- You’ll no longer having clients asking you to buy them a new sewer system.
Revenue increasing tool #4. Environmental testing equipment that’s right for your area. This might include radon, water quality, mold, indoor air quality (VOC), Chinese drywall, asbestos, lead paint, carbon monoxide and gas leakage, etc. All areas of the country are drastically different when it comes to the demand and market for these services. In many areas, an inspector would invest in radon testing equipment and education far before other tools mentioned in this article. The principle that should guide an inspector in this area is demand; and don’t assume there is no demand but patiently and over-time look into it. I have found that in any area, there is some form of environmental testing people are interested in. Also, don’t assume a home inspector can’t do this type of testing even if others tell you so. For example, in the state of Florida, mold testing and remediation is a state-licensed profession; however, a professional with a home inspector license can legally take samples as long as a licensed laboratory produces the report that explains the samples taken. So in many instances, testing can be performed by a home inspector, but it’s important to stay within the legal perimeters of such testing. This equipment can cost in the range of $500 – $2,000 for each specific type of testing. Reasons there may be client demand in your area for one or more of these services:
- Known high radon levels in the area. Required by law in some areas. Required by some lenders and relocation agencies.
- Indoor Air Quality VOC testing is likely in demand everywhere. People with chemical sensitivities, major allergy problems, concerns about high amounts of indoor mold, formaldehyde, exposing ventilation problems. High rise condo buildings often have poor air quality.
- Area of high humidity causing demand for mold spore testing; conflict of interest in having mold remediators performing mold testing; Individuals with high sensitivity to mold; recent water damage or active leakage inside building.
- Areas with a high percentage of homes using private well water will usually have a high demand for water quality testing; conflict of interest in having a well company that sells filtration systems performing water quality testing.
- If special licenses are not required for asbestos and lead paint sampling for laboratory testing, then this is an opportunity for home inspectors as there is always demand when purchasing a pre 1984 home that these materials may be present and laboratory testing is generally inexpensive.
Revenue increasing tool #5. Tools that provide better home inspections. This last category of tools do not in themselves provide an additional service for which there would be an additional fee; but if you combine these with, let’s say an ASHI certification, passing the national home inspector exam, or investing in some authoritative education, then your home inspection average fee might go from $325 to $425 or $500. These would be tools that expose high frequency, high cost or high danger problems. What kind of tools might add so much quality to a home inspection that people see the reason to pay a margin more? When you review the list below, keep in mind, it’s got to be the same equipment the pros use; not some cheap version for a home inspector budget.
- Electrical multimeter – the only (again) “real” electrical testing device
- 30 foot extension ladder for two story homes (I often charge an additional fee as this is not a home inspector service)
- Gas leakage tester or CO tester
- Soil probe to check foundation depth
- Probe thermometers to perform (again) “real” Delta T tests
Revenue VS. Cost
In the previous article “Home Inspector Tool Box” essential principles were covered to guide one in selecting which tools to purchase. I would say that those principles are absolutely crucial when beginning to invest in high cost tools that increase revenue. I strongly recommend that you read that article if wanting to spend several thousand dollars on a piece of equipment. It is always important to analyze the return the tool is going to bring to the investment. A new tool and proper education may cost you $6,000. Well, what about the time investment per inspection; the time in repairing, maintaining, shipping back and forth to the manufacturer? What about the cost in having to throw away a piece of equipment and buy new? One must calculate the cost of lab fees, cost in sampling equipment, etc. Think also about the eventual cost of needing a backup device, or additional equipment for more than one inspector. We should be able to see easily recovering the cost of the equipment and then making additional revenue within a few months time, for after more than a year, additional costs in repair will be coming. What about the cost of purchasing the wrong piece of equipment through misleading marketing with no return policy? While there is opportunity for major revenue increase, there is also a point where the cost significantly increases in purchasing, maintaining, and replacing equipment. A home inspector will be taking on a much greater financial risk as he starts to purchase this type of equipment. Answering the following question will help in resolving the question of revenue verse cost when seeking to purchase tools that increase revenue.
Tool OR Toy?
Let me give you a sample list to see how you would answer:
- Laser equipment for foundation measuring
- Cool telescoping ladders
- Fancy photo and video equipment like SLR cameras, 3D cameras, extension cameras, probe video recorders, this list never ends!
- Cheap little anything; IR camera, CO testing, etc. etc.
Any piece of equipment that produces a WOW factor can serve a marketing purpose causing realtors to refer more business. Equipment can certainly be a value proposition differentiating us from the competition. Definitely this “marketing” purpose could cause exponential company growth. That being said, we must answer some questions. Wow factor at what cost? How much does this really set me apart? If the tool cost justifies the marketing aspect, that might be a good purchase decision, but you can see how this viewpoint could get out of hand very quickly. Technicians in general spend way too much money on what amounts to toys and the only one really saying ‘WOW’ is the technician himself. If I were to purchase a high cost laser level for example, I better darn well develop a reputation as a local structural inspector and get regular jobs inspecting foundations as follow up on home inspection reports. If not, well, the only other justification I can think of is if I run into so many majorly moving foundations, that this allows me to establish myself as highly competent inspecting foundation problems for which I can charge more for my home inspections and become in higher demand.
Other reasons for purchasing toys could simply be personal or be part of running a good business in other ways. The safety of using a drone might be worth the time and expense of getting a pilot license, and purchasing and maintaining the drone. 3D cameras would definitely be helpful if there was ever a law-suit or for answering whether something was missed by the inspector. To control the tendency of simply purchasing toys and calling them tools, I recommend making sure this will be a real and genuine service for which in one way or another it will be creating more revenue; not just a cool thing to use or some “new invention” to make inspecting easier as these generally just end up going into the garbage can.
Is There Really Enough Value to Charge More?
Well, I’ve just laid out one of the secrets to my companies high fees using tools that increase revenue. Does this really provide so much value? Well, think of this; my own clients could go and find this article and read all the ways and reasons I’m charging more than most inspectors in my area. What impression will this leave? The impression of getting scammed? Well answer me this questions; after having read this article, if you were buying a home in South Florida, who would you hire for your inspection? I think the answer to that question says what we need to know about this topic. Without these tools, education, and certifications that I and my inspectors possess, what other options would our client have?
- Hire individual contractors who specialize in their field to perform each one of these services. This would cost probably a few thousand dollars more. There would be a conflict of interest not know if what the contractors are saying are objective or not, and the seller might be inclined to reject the findings as contractors just trying to get a job.
- The client could go spend a year to several years trying to get all the certifications themselves, then spend 10s of thousands of dollars on the tools, just to buy that one single home; oh wait, they’ve just spent way more money…
- The point: This is tremendous value to a property buyer causing them to happily pay a few hundred more dollars to have thousands of dollars of investigation performed and potentially negotiate thousands more dollars off the price to justify inheriting the problems that have been located in the property. That is the reason for home inspectors to invest in tools that increase revenue.
In the next article on how home inspectors can make more revenue – read about my story when my office admin purchased a new construction home in another area of the state. What kind of inspector did she look for? Did she look for the cheapest, the most expensive, and how did it turn out? I think the answer to that story will explain exactly why and how inspectors can make more revenue. That’s it for this super short article: Tools That Increase Revenue; see you next time.