Should Landlords Get Home Warranties For The Properties They Rent?
When you own a rental property, your number 1 priority is to keep your home in a good condition to attract tenants. While homeowners’ insurance covers damage caused by lightning, fire accidents, etc., a home warranty will shield your appliances and systems. But are home warranties for rental properties worth it? Read through the article to know the pros and cons of getting a home warranty for a rental property.
What Is The Landlord’s Home Warranty?
A landlord’s home warranty is a service contract that covers appliances & systems and protects the homeowner from costly repairs or replacements. The home warranty plans for landlords include major equipment like the water heater, refrigerators, air conditioners, dishwashers, clothes washer & dryer, built-in microwave, heating & electrical systems, garbage disposal, and many more.
Landlord’s home warranty protects all kinds of homes, be it a townhouse, single-family home, or multi-family home, but the pricing and coverage vary depending on the type of home & plans.
How Much Does A Home Warranty For A Rental Property Cost?
The cost of home warranty plans for landlords varies with the plans opted for and warranty provider. Generally, the price of a warranty plan ranges from $350 to $600 annually. In addition, you must pay a service call fee of about $50 to $100 upon filing a claim, along with deductibles as specified in your warranty plan.
Factors To Consider Before Selecting A Home Warranty Plan For A Rental Property
There are several home warranty plans you can choose from. But before selecting the best fit, you must consider several factors including:
1. What does a home warranty for landlords cover?
Some home warranty plans exclude specific systems and appliances. Check what your plan covers and what it does not. Also, check with your warranty provider if you can choose only the appliances and systems you want covered and build a customized plan.
2. Who pays the service call fee?
On filing a claim, a service call fee must be paid. Determine beforehand who will be responsible for paying the fee, you or the tenant.
3. Whom does the customer representative communicate with?
Find out if the customer support representative will communicate with you or the tenant when a service request is placed.
4. Is the home warranty company reputed?
It is vital to select a reputable warranty company to get reliable service. Check for transparency, industry experience, and customer reviews to avoid selecting a fraudulent company.
5. Are you obtaining the best deal?
Make a price & plan comparison to determine if you are getting maximum coverage at minimum amount.
Why Should You Buy A Home Warranty For A Rental Property?
When it comes to rental properties, you are responsible for the repairs or replacements of faulty appliances & systems, unless the equipment breaks down due to mishandling by the tenant. Sometimes even the most careful tenant may experience problems with the refrigerator, air conditioner, etc. and fixing these major equipment can cost you heavily. But with a landlord’s home warranty you need not worry about out-of-pocket expenses. Some of the advantages of buying a home warranty for rental property include:
1. Peace of mind
With home warranty plans, you can have peace of mind as they protect you from unexpected costly repairs or replacements.
2. Increase your home value
Most of the tenants look for property that is protected. By covering your home, you can get a competitive edge in the market and find a tenant more quickly than those who don’t have a warranty.
3. Service from licensed technicians
When a system or appliance breaks down, you need not go in search of an insured technician. All you have to do is file a claim. Your home warranty company will assign you an insured, licensed, and skilled technician to fix the issue.
Drawbacks of a Home Warranty For A Rental Property
Some of the cons of a home warranty for a rental property are:
1. Unused policy
Your covered appliances & systems may keep working smoothly throughout the service period. In case only a device or two breaks down, requiring a repair that costs you only a few dollars, the rest of your warranty period may go unused. This may make you feel like your warranty plan is a waste.
2. Additional expenses
Warranty plans may not cover all your home appliances and systems. If an excluded item breaks down, you’ll have to pay for the repairs from your pocket.
3. No choice of contractors
Some companies won’t let you select a contractor of your choice. Only the technicians assigned by your company will service your appliance, whether you like their work or not.
A home warranty for a rental property doesn’t approve repairs or replacements due to mishandling or lack of maintenance. Therefore, it is imperative to maintain the appliances and systems well. However, if the equipment fails due to normal wear & tear or age, a home warranty can save your pocket from expensive repairs .