Being a landlord means that you have to deal with repairs, some large and expensive and some you can do yourself.
Many landlords wonder if carrying a home warranty for rental property is worth it. A home warranty can help cover some of the cost of large repairs like an AC unit, furnace or major appliance.
There are lots of things that landlords should consider whether or not to get a home warranty for their rental property.
Home Warranty for Landlords – Pros
A home warranty can be extremely helpful if some of the big and important systems or appliances within the house fail or break down.
For example, if the rental property is older and has older systems like plumbing, a home warranty can save landlords a lot of money and stress. It’s inevitable that something major will break at some point.
Of course, home warranties cover a lot of different things at a rental property. Many major repairs that would cost the landlord a lot of money are all or partially covered instead.
When a repair is needed, the home warranty company sends one of their service people out to do the task. Landlords don’t have to worry much about finding the right service person.
If a landlord doesn’t have some money set aside for repairs, a home warranty is a good way to provide some peace of mind.
Home Warranty Rental Property Cons
The biggest issue that landlords have about home warranties is the cost. They may be paying every month for the policy but never need it. Or, they may need it so rarely that it isn’t worth the price.
Another con with having a home warranty is that it usually features exclusions or things within the rental that are not covered. Often, if something breaks that is not covered by the warranty, the landlord must foot the bill.
Policies can differ between companies, so landlords may not know exactly what their coverage includes without a close look. They can make assumptions about coverage and later find out a major repair isn’t covered.
When repairs are being made, landlords don’t have the choice of who will do it. That’s up to the company, and many landlords don’t like to have just anyone work on their property.
Home Warranty Worth It?
To decide if a home warranty is worth it, you’ll need to consider a few factors.
A newer unit is less likely to need major repairs. An older property with older mechanics could result in quite a few.
A good home warranty will provide comprehensive coverage for a moderate price. However, there are many poor policies out there that cost far too much to be considered a good deal.
A poor home warranty provider will beat you up on claims and take far too long to respond. This can create stress for you because your tenant will want the repairs completed.
If a landlord can save up each month to cover unexpected repairs, then a home warranty may not be necessary. If they own several older properties, a home warranty plan may really help.
What Do Real Landlords Think About Home Warranties for Rentals?
Getting a home warranty for a rental property is really up to the landlord. They can vary based on the age and quality of the rental, plus the location.
Here’s a screenshot of landlords discussing this question in our private Facebook group for Landlords.
You can see even more comments on that post by checking it out in the group.