Home Warranty to Keep Repair Cost Low

[Walter Key]

Just wondering if anyone else keeps home warranties on their rental properties in order to keep repair cost to a minimum. Between appliances going out, minor plumbing issues, etc; paying a monthly premium and a $75 deductible when a problem arises has been well worth the money for me over the last few years. Anyone else factor in home warranties into their investment strategy? If so, how do you feel it compares to the standard percentages for planned repairs and/or capital expenditures? 

Walt

[David M.]

Originally posted by @Walter Key:

it is interesting to see the differences of opinion on this. For those that do not keep a home warranty, how much cash reserves do you maintain for each of your properties? Have you ran the numbers and determined your premiums would cost you more?  I suppose that could vary depending on the warranty specification, age of the home, etc etc.

 If the premiums cost less than the repairs, the insurance company would go out of business. I maintain about $1200-$1500 in reserves per property, and I own enough properties that those reserves are ample, as I can use that pool of money for any repairs across the portfolio.