Is a Home Warranty worthit

[Ashraf Martin]

Hi Guys

So I heard on a podcast today about a home warranty, in this specific case he was paying $500 a year per property and he claimed on a plumbing job which would have cost $3,800 (there was a leak in the walls) and he only ended up paying $50 deductible.

When I do the calculations on BP Rental Calc I'm factoring in the 5% for Repairs and Maintenance and 5% for Capex so I was wondering could I instead add this to the analysis and remove that 10% especially if you're purchasing older homes.

I’m unfamiliar with home warranty so not sure if there’s a limit to how many times you’re allowed to claim or if there’s anything you cannot claim for.

Your insights are appreciated.

[Alan Grobmeier]

@Ashraf Martin, I use home warranties for my places, but for a different reason.  I PM my properties myself.  The home warranty makes the tenant call the home warranty company for repairs.  I don't have to search for tradesmen, etc.  

For me it is a 'cheap' PM tradeoff.  I save the PM money, manage the property myself, and don't have to have a rolodex worth of trade contacts that may or may not be busy.

My .02.