Any suggestion on the Home Warranty Companies for Rental Home?

Question

Any suggestions on Home Warranty companies for Rental Homes  in california.

Also looking for suggestions and inputs on what key appliances would be required to be covered which would turn out to be most expensive to repair.

[HVAC, Heater, Dish washer, others??]

Vishnu Balraj · Answer

Thanks much and Appreciate everyone's thoughts and sharing your experience/wisdom.

Percy Matsunaga · Answer

@Vishnu Balraj

I live in CA and that home warranty is a bunch of wasted monies. Don’t spend time and money on the warranty. You will find that they will do a poor job getting someone out to take a look at your appliances. better off just getting a new one.

Peter M. · Answer

@Vishnu Balraj Waste of money

DeeDee Cherubini · Answer

As a Realtor, I'd recommend Fidelity Home Warranty. If their contractor can't get to the repair in a timely manner, you can get your own contractor to do it.  You do need prior authorization, and you'll probably spend about an hour on the phone getting it, but in my opinion that hour is well worth the cost of a big ticket item.  A friend of mine purchased a house and a few months later the water heater went out. The Fidelity assigned couldn't get there for 4 days so I called my contractor and he replaced it the next day.  It took 2 phone calls about 30 min each and they needed to speak with the contractor, but approved the replacement easily.

Randall Alan · Answer

I also have another suggestion for you... and this is going to depend on what level you run your rentals at.  We don't do high-end rentals... Our average rent is $1,000 and below.  When it comes to repairing appliances, we more often than not just by another used appliance, versus having a service call on the existing one.  (I'm talking kitchen appliances here... not hard wired things like ACs & water heaters)  They are clean, they are working, but they are used.  Here is our philosophy.  We can pick up a quality used stove for on average $100-125, versus $600+ new.  Refrigerator.. probably $200, versus $800-$1000.  Quite literally, we can replace almost any broken appliance for cheaper than calling for service on the broken one.  We will always go and check it out and see if it is just a heating element, or a circuit breaker, or what-have-you... but if its really broken, odds are we are just gong to replace it with a new, used appliance.

A service call on any appliance typically start at $95, then it goes up from there.  We quickly came to the realization that service calls just don't seem worth it.  By the time we pay for parts and the service call, I could have bought another used unit for less.  So I just wanted to throw the concept out to you as an alternative to a lot of service calls (and home warranty idea).

Again, it depends on your market, and it depends on how much of a landlord you want to be.  For us it's "have dolly, will travel" when its something easy.  We do have some higher priced rentals that would demand nicer appliances with rents in the $1,500 - $1,700 range... 2000sf types in our area.  For those we would probably go with something stainless that was used and might cost us $100 - $150 more than the base level ones we do for the cheaper units.  There are several sources for all of these... you can look up "used appliances" in your area... usually you will get a short warranty. (1-3 months) on them if purchased from a store.  Or, we keep an eye out for craigslist / facebook marketplace ads that look good.  We have a storage shed we keep a set of appliances at the ready so that when someone calls, we have all the basics covered.

I'm sure someone could make the counter-argument that if you buy new, you won't have to deal with it for years... which is another way to approach it... but for us, it's about minimizing costs where possible as long as we get a reasonable result.  In the three years we've been in rentals we haven't had to re-visit one of the used appliances we put in, so its working for us.

Randy

Dick Rosen · Answer

I agree with @Randall Alan one word, DON"T, I have only had bad experiences with Warranty Companies.

Randall Alan · Answer

I have one word for you:  DON’T!!!

A home warranty seems like such a good concept... limits out of pocket expenses and gives you a known maintenance expense.

The problem is this:  Home warranty companies don’t move at the pace you need them to.  Their process is designed to frustrate you to no end!

Example:  our AC went out at our house.  Any repair guy could have fixed it in a day.  The home warranty company brought in a contractor to fix it...(blown compressor)... first the repair had to be approved by the warranty company... that took several days.  Then the home warranty company insisted on supplying the part  (something any local guy would gone and picked up same day)... it had to be sourced and shipped in, but because of the particular unit it was out of stock.   It LITERALLY took us 4-5 weeks and a dozen frustrating (pass you around to another department / leave a message experiences)  to get our AC fixed.  Ultimately we had to demand / negotiate a cash settlement and brought in a local guy who had it fixed in 24 Hours).  Fixed in a day by our guy after 5 weeks of run around!!!

In that 5 weeks they offered (and did) buy us fans to use to help keep the house cool... but if you live in a hot state like Florida fans just won ‘t cut it.

Likewise with a dishwasher repair, same thing, they have to order factory parts and they have to be mailed to you.., took 2 service calls and 3 weeks to repair.  So while home warranties seem like a great solution, I predict they will leave you very frustrated in the end.  I suggest setting aside funds for repairs and maintenance and avoiding the hassle!

The above examples were my personal experiences... can you imagine if it were your tenant?  No AC for over a month?  You would likely have to go buy window units to get them by!

Randy

Vishnu Balraj · Answer

Thanks Joyce, Any suggestion on what Home warrany companies to choose? I was referred to American Home Shield or Home Select - Any thoughts on those companies or others?

Joyce Tavares · Answer

I used to have home warranties on all my rentals but now I just have it on the units that have items that would be expensive to repair.  I  have found, and this may not be true of all warranty companys, that the people they send are the ones that have bad reviews on Yelp, take a long time to do repairs, and oftentimes have to come back a second time or I have to get a second opinion.  Took them 4 months to install a floor furnace, which took less than 2 hours to install.  I had to continually remind them that the tenant was without heat!!

I also figured the cost of the warranty, plus the service fee each time they come out, is just not worth it to me as my units are in great shape when I rent them.  If I purchase a new rental, then I always get it, at least for a year or two, to cover anything I am not aware of like water heaters, furnaces, digital appliances (expensive to repair), plumbing and electrical.  If you are considering it I would suggest you do your research...not all companies are the same.  Good luck!!