Should I buy a Home Warrenty for my flip or not?
I am closing on a property within the next month should be a fairly expensive remodel and become little horse farm in the 400k range.
The property is a foreclosure but not in terrible shape as it was built in 2004. Of course the electric and water wasn’t turned on so I don’t know how the wells are, septic, and the hvac unit. Would it be worthwhile to purchase a home Warrenty just to cover myself in case there are any issues with any of the big ticket items? Or is it a waste of $400-$600?
Maybe my thinking is wrong but I figured for that price it could save me thousands if I need to replace the hvac unit etc.
Property is in NC.
Look forward to hearing your responses.
@Landon Schlabach It’s a bit of a gamble. The place have old appliances or systems on the brink? Maybe a good idea. Can’t speak to every area and perhaps even the quality of your particular warranty details. We got a place two years ago, got the warranty. Heater goes out few months in, got the warranty involved and there’s a deposit to be paid. Also they pick the installer and unit. They said they could get a name brand unit for $100 wholesale. Floored. Cash out option got us $250 and we picked the unit and company. Can’t even imagine what quality unit and installer we would have received for their price. Just our experience at least. Might be worth reading the warranty fine print.
You should know the condition of the major ticket items via your inspection during Schow at purchase. Buying a home warranty while you perform a rehab is most likely a waste of money. Your buyer on the end will likely want/ask for a home warranty for 1 year so that is the time to buy it (when your done and have a buyer under contract).
Very good thank you all for your advice. I think I am going to pass. Who knows what kind of systems the Warrenty company would replace with if we have any issues. I would rather pay a little bit more and have it done right.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.