Anyone else actually using home warranties on rentals?

[Alicia Sierra]

I use home warranties on some of my properties — mainly ones where the systems are older but still working — and I’ve had a pretty good experience with it so far.
I've had some big replacements come up and the warranty ended up covering enough that it basically paid for itself in a few instances. What I like about it (and why I’ve kept doing it):

• Helps smooth out those first couple years of ownership
• Takes a little pressure off cash flow early on
• Buys time to build reserves before bigger replacements hit

I don’t look at it as “this will cover everything,” because it won’t. It’s more like a buffer while the property stabilizes. That said… I’ve also learned pretty quickly that:

• the details matter A LOT (coverage limits, exclusions, vendors, etc.)
• and going with the cheapest option is usually not the move

So far, it’s been worth it for me in the right situations — especially on properties where I know systems are getting up there but still functional. That being said, you really do need to know what will be covered & expectation of the warranty company & how to communicate with the tech on site.  Curious what others are doing:

• Are you using warranties at all on rentals?
• Had good or bad experiences?
• Or do you just build it into reserves and skip them completely?

Always looking to refine how I’m approaching this.  My issue now is the renewals.  We got 3 year warranties up front (much cheaper on a per month basis) & it is difficult to calculate if renewal is worth it at times.