Specialist · Member since 2018 · 21 posts · 2 votes
what are peoples experiences with home warranty plans with rental properties. My parents have one for their house and they love it. They pay 680 a year and then any service work cost a flat rate of 75 dollars. A recent example is this winter the blower motor and control board on the furnace went out, they sent a technician next day they replaced the board and motor for 75 dollars. that service would have been almost 1000 dollars, seems like a good deal. My only concern would be if the speed of the service is not good tenants may get frustrated and you still need to hire someone and pay for expedited service .
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
7y
In general home warranty plans do not cover rentals. Renters are way harder on everything, so there will be a lot more activity with a rental.
In general warranties are not a wise financial decision. YOu are usually better off not paying for a warranty and paying costs out of pocket as they come. The warranty companies will not provide the service at a loss so you are paying more. You also have more flexibilty on providers and don't need to worry about the warranty company denying claims.
Specialist · Member since 2018 · 21 posts · 2 votes
7y
I am simply doing research of all aspects of owning rental properties. Working on my first deal, but I am a very research oriented person. I did talk to one company that have many plans for rentals. If I pay out of pocket and not use there vendors they reimburse part of the expense. They even have a policy that just covers large expenses only at a deductible rate, they would need a appraised and value inspection report for this plan. Just my curious. Thanks for the input.
Covington, KY · Member since 2017 · 3 posts · 0 votes
7y
I used a home warranty for the first four unit I bought. I asked the seller to pay for the home warranty as part of the deal. The price was around 1000 for the warranty. The property was a little neglected. They ended up replacing a plumbing stack that went bad. A hot water heater and two broken stoves I bought off craigslist for 50 bucks a piece. The total bill for the year was over 4000. When it was time to renew I just cancelled.
Realtor · Rocklin · Member since 2016 · 128 posts · 67 votes
7y
Hey @Jason Baker, Here's my two cents on home warranties... In general they arenot worth the money. They tend to have many exclusions. A lot of policies will not cover existing problems. The company can deny any claim you make based on the assertion that it was a pre-existing problem. Most policies will not cover you if they believe you or your tenant have insufficiently maintained the item. They will use this rationale to deny many claims. You will still need to pay a service provider fee and will have no say in who your service provider is. The warranty will also only cover a small portion of the cost.
Specialist · Member since 2018 · 21 posts · 2 votes
7y
@Kim Stofan I feel I have my answers. I thought much of the same just curious if anyone has ever used any of these services for their properties. Thanks for everyone's input
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
7y
@Jason Baker I love my home warranties that I have gotten for my duplexes. But there's a catch to that statement. I have asked the sellers to purchase a 12 month home warranty upon my purchase. It allows buyers to not worry about capex for the first 12 months, while paying nothing for the warranty. I have not renewed a single home warranty after the sellers initial 12 months. I have used them on several occasions. Getting a dishwasher fixed next week. Cost me $75 deductible instead of $200 repair. They are a complete pain to deal with, but it does save you money when something breaks. But the price of them is not worth it, generally speaking. A renewal for my duplex was $900 for the year. No thanks.
Specialist · Member since 2018 · 21 posts · 2 votes
7y
Thank you, nobody who commented before had used one. That is a great idea to have sellers issue warranty on purchase I will use that in the future. Makes sense
Edmond, OK · Member since 2012 · 456 posts · 270 votes
7y
@Kim Stofan
Exactly this happened to me, the service provider selected by the Warranty company simply stated that all 3 AC units in my home were installed incorrectly, took my $75×3=$225, and denied anymore warranty claim stating its a preexisting condition.
If one is purchasing a Warranty, spend the extra $50 or so to include 'installation issues', so that preexisting conditions are covered