How Do I Know If Its Worth The Cost
To determine whether or not a home warranty for your rental property is in your best interest there are a few things to consider first and foremost:
Best Home Warranty For Rental Properties
When we talk about home warranties, we usually think of homeowners. However, since home warranties protect the budget of those responsible for repairing and replacing major systems and appliances within a home, theyre also useful for landlords.
If you own a rental property, there are a number of reasons why a home warranty might be beneficial for you. In this review, well go over some of these reasons and explore our top home warranty companies for protecting your rental.
Not Used To Making Repairs
A new homeowner who has only rented previously is likely accustomed to calling the landlord when repairs are needed. Having the responsibility of owning a home requires a shift in thought when something in the house needs maintenance. But if it comes to major repairs, it still may be difficult for such a homeowner to know where to turn and what to do.
With the benefit of a home warranty, the homeowner only needs to rely on the services of the technician that the warranty company sends. The technician will handle all aspects of the process, including the diagnosis, repair, installation, and cleanup in the house.
If you are a new homeowner, you may be feeling the pressures that come with this responsibility. Your stress can mount if an appliance or system breaks down. This is when a home warranty can come to your rescue and provide the peace of mind and help you are looking for.
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Should I Buy A Home Warranty
In the age of information, the tenant has access to all sorts of information about their rights. They leave online reviews and share information with their friends. Gone are the days of an old school landlord mentality where you can fix things whenever your favorite handyman is available.
Tenants are paying high rents in San Diego and you have to take care of maintenance issues quickly. Home warranties have a 50/50 ratio. That means that 50 percent of the time, work gets done in a somewhat reasonable timeframe. Then its an absolute nightmare the other 50 percent of the time.
Protecting Your Property And Your Tenant Satisfaction
The biggest reason not to have a home warranty is time. You submit a home warranty request, and it takes a day at least for the vendor to contact you. Then, they will contact the tenant and set up a time to look at the problem. That may take a couple more days. They will go out to the property, and may not tell you or the tenant what they find. Theyll report it to the home warranty company first, and then the information makes its way to you.
For time-sensitive repairs on things like refrigerators, air conditioning, stoves, and other problems, the extended time is not acceptable. Its especially not acceptable if you want to keep your tenant in the property. The number one reason tenants move is that things werent fixed in a timely manner.
The best business practice is to not use a home warranty, and just use your own vendors.
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How To Choose A Home Warranty
Before you choose a home warranty, its essential to review your options in light of your priorities for a policy. By following these steps, you should be able to pick the best home warranty policy for your rental property.
- Consider your coverage needs. Think about the components of your rental home that are most likely to break down over the next year. The typical home warranty plan term is one year from the date of purchase, so you dont want to look too far into the future when deciding the home systems and appliances you want to cover.
- See what home warranty companies are available to you. After determining the most important coverage items, you can start researching home warranty providers in your area. You can request a personalized quote from each company that interests you.
- Compare each companys covered items and limitations. Every home warranty company will have a different suite of covered items, available plans, and contract terms. Youll want to review the terms carefully, compare the coverage limits , and decide which company best matches the coverage needs you have identified.
Best For Quick Coverage: The Home Service Club
The Home Service Club has the best quick coverage for rentals. When you acquire a new rental property and want to ensure that it is covered quickly, The Home Service Club is a perfect option to consider. The Home Service Club offers comprehensive coverage, and it will start just ten days after paying the premium. Many home warranty companies will require a 30 day waiting period. Homeowners who invest in The Home Service Club home warranty will benefit from the 13 years that this company has spent in the industry and the overall fair pricing and coverage caps that come with the plan.
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Why A Rental Property Needs A Home Warranty
A home warranty is a residential service contract that covers systems and appliances that break down from normal wear and tear. If you have a home warranty and a covered item breaks, you contact your provider, who will then send a technician to diagnose and repair the problem. If the problem is covered, youre only out the cost of a service fee rather than the cost of the entire repair or replacement.
In addition to saving you money, your home warranty provider will also take care of a lot of the repair logistics for you, including finding a licensed, trusted contractor and sometimes even scheduling an appointment directly with the tenant. Most providers dont put an age limit on the systems or appliances they cover, making home warranties perfect for older rental units. Additionally, the cost of a home warranty is tax deductible as an operating expense of your business. In the end, a home warranty makes your life easier, especially if youre balancing the cost of your home and several rental properties at once.
How Much Does A Home Warranty For Rental Properties Cost
The cost of home warranties for rental properties varies based on the type of the home, desired coverage, state of residence, optional add-on choices, and other factors.
We have compiled a list of the top home warranty companies for rental properties. It includes monthly premiums, deductible pricing, and discounts to make your decision easier. Submit a quote request for more details.
American Home Shield
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Plans Pricing And Coverage
The two plans from Choice are the Basic Plan and the Total Plan. The service fee associated with Choice Home Warranty is $85. Overall the pricing is considered fair and better than average. With Choice Home Warranty, a $3000 coverage limit is in place to help homeowners that have expensive repairs or need a replacement. The fact that these plans have a mix of systems and appliances helps Choice stand out.
Heres a more detailed look at CHWs plan options:
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What Is A Rental Property Home Warranty
A home warranty for a rental property is similar to a warranty people purchase for their own home. Rental property home warranty service contracts cover the failure of appliances and systems such as refrigerators and stoves, heating and air conditioning units, and electrical and plumbing systems.
One of the potential advantages of having a home warranty for a rental property is that the warranty makes budgeting for repairs more predictable.
When repair costs rise and fall from one month to the next, cash flow goes up and down as well. By having a rental property home warranty, the cost of the annual warranty premium can be evenly spread across twelve months.
In most cases, the only additional expense a landlord would pay is the deductible each time a repair claim is made under the home warranty.
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How Soon After Purchase Is My Home Warranty Effective
Most home warranty companies have a 30-day waiting period before purchased plans are effective, while some companies may offer warranties that go into effect immediately or have longer waiting periods.
Always be sure to read the fine print of sample contracts for providers from which you request a quote to determine how quickly you will be able to utilize your home warranty coverage.
Homepro Keeps Things Simple And Costs Low
Before you invest in a property, an inspection takes place to determine whether or not it is in good condition. Even when inspections come back positive, investors should be wary about placing too much stock into it. The reality is that even if your investment property is newer and doesnt have any flaws, it still needs specialized maintenance and protection.
Investors need to be mindful of the fact that the appliances and systems which make your investment property so valuable, will eventually malfunction or break down, requiring repair. Therefore, youll need to invest in repairs, and the more high-end and new these appliances and systems are, the more expensive repairs will be. To summarize, investors need to develop an effective maintenance plan for their investment property and use warranties to provide coverage in the event of a significant breakdown.
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How Does A Home Warranty Work
Each warranty plan is specific to the purchaser. But in general, a home warranty works by covering a portion of the repair costs for your homes most critical systems and appliances.
As the landlord, your tenants will need to inform you of any issues that may arise with the appliances and home systems in your house. When a repair or replacement needs to be made, you will need to make a service request to your warranty company.
From there, the warranty company will be able to determine if your plan covers the request. If it is covered, they will then contact a service provider within their network to schedule a house call with you. You will arrange with the service provider to facilitate a time for the repair. The service provider makes the repair or the replacement, and you pay a nominal fee for the service.
If you have new appliances and systems installed in your home, they may still fall under the manufacturers warranties. This can be difficult to manage if your appliances are all from different companies.
Having warranty coverage creates peace of mind for you, as a landlord and/or property owner, that even if the manufacturers warranty fails, you still are covered.
Not only does a home warranty plan protect you from paying exorbitant fees for appliance repairs, but you also will be able to rest a little easier knowing that one portion of your responsibility as a landlord is covered.
Wondering About Home Warranties For Rental Properties
When you are buying a residential property, it is common sense to acquire a home warranty. Home warranties, like warranties for familiar products like tech devices, protect your investment for a certain amount of time, so if something serious breaks down, the costs of repairing or replacing it are less extensive.
Typically, home warranties last one year and cover the major systems in your home though exact coverage will depend upon your area, you can expect to cover items like the central air conditioning system, kitchen appliances, plumbing and electrical, and the propertys roof. Because homeowners insurance rarely covers issues with these elements of your home, home warranties are exceedingly useful.
However, as property investors know, what works for a residential property doesnt necessarily work for a rental property.
Heres what you need to know about acquiring a home warranty for a rental property, so you can keep your investment fully protected.
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Isnt Homeowners Insurance Enough For Rental Properties
Homeowners insurance is a policy that covers structural property and personal belongings. It also protects you from the liability of accidents at home or the effects of disasters, or thefts.
But, a home warranty is a service contract that covers unexpected repair and replacement costs. Major home systems and appliances such as, plumbing systems, electrical systems, and other peripherals that may fail due to age and natural wear and tear are covered.
Hence, just homeowners insurance might not be insufficient to cover all potential expenses accruing to rental homes. We recommend you getboth of these servicesfor comprehensive protection of your rental properties.
How Much Does A Home Warranty Cover
The extent of your home warranty coverage will depend on the limits outlined in the providers user agreement. As a result, its important to read those terms thoroughly and ask questions if anything is unclear so you can avoid unexpected repair costs in the future.
In some cases, the amount of coverage an item is eligible for will depend on the age and prorated value of the item, such as with AFC Home Clubs formula for HVAC systems that are five years or older. In other cases, the total coverage is broken down per item, such as Liberty Home Guards $2,000 limit for each covered item.
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Plan & Cost Breakdown
American Home Shield offers three different plan options: ShieldSilver, ShieldGold and ShieldPlatinum. Take a look at the details and cost of each coverage option below.
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AHS offers property owners a selection of optional add-ons, which are listed below:
- Electronics protection plan
- Guest unit less than 750 square feet
While American Home Shield offers a variety of affordable plans, the cost of your specific coverage will vary depending on your location and selected add-ons. For example, the cost of coverage may be more expensive if you select the ShieldPlatinum plan, add on coverage for a well pump and live in Atlanta, Georgia, than it would be if you chose the ShieldSilver plan and live in Chapel Hill, North Carolina.
Additionally, your monthly plan rate will change based on the service call fee you select, with a lower service fee increasing your monthly payment and a higher service fee decreasing it.
If youre interested in an American Home Shield plan for your rental property, fill out this quick form or contact a representative at
Top 5 Home Warranty Companies For Rentals
There are various home warranty companies that offer plans tocover the major home systems and applianceslike HVAC and electrical systems, refrigerators, washers, etc. They also give an add-on option for covering less critical devices like pools, septic pumps, etc.
It can be hard to decide on one when there are many choices, so we have listed the top home warranties for rental homes below.
Offers $200 off + 2 Month Free + Free Roof Coverage
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Can Landlords Get A Home Warranty On A Rental Property
THE MATERIAL CONTAINED IN THIS ARTICLE IS PROVIDED FOR GENERAL INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE PROFESSIONAL ADVICE.LANDMARK HOME WARRANTY DOES NOT PURPORT TO BE A SUBJECT MATTER EXPERT WITH REGARD TO THIS MATERIAL, AND YOU SHOULD CONDUCT YOUR OWN RESEARCH AND/OR SEEK THE ADVICE OF APPROPRIATELY QUALIFIED PROFESSIONALS WITH REGARD TO YOUR SPECIFIC CIRCUMSTANCES BEFORE YOU TAKE ACTION. LANDMARK HOME WARRANTY ASSUMES NO RESPONSIBILITY, AND SPECIFICALLY DISCLAIMS ALL LIABILITY, FOR YOUR USE OF ANY AND ALL INFORMATION CONTAINED HEREIN.
Many landlords wonder if they can purchase a home warranty on their rental properties. The answer to this question is yes! Property managers and homeowners can purchase a home warranty on any house at any time. Owning a rental property comes with a lot of work, maintenance, and stress! As a property manager, you are responsible for a lot, from finding tenants to repairing and maintaining the property. Purchasing a home warranty for a rental property can help you as a landlord manage much of that maintenance, cost, and stress.
What Should I Consider When Considering A Home Warranty For Rental Property
Its important to consider the age of the rental home and its accompanying appliances and home systems. If its an older home with older appliances and systems, home warranty protection is a no-brainer. Even if its anewer condo or house, appliances and home systems can still malfunction, especially under heavy use common in rental properties. American Home Shield covers items, no matter their age.
Another factor to consider when deciding on a home warranty for your rental property is whether or not you have more than one rental. The more rental properties you have, the more you have to managethe cost of a home warranty may be a small price to pay for convenience.
Also, when purchasing a home warranty, make sure you understand every detail about the warranty.What does it coverand exclude? The last thing you want to find out when placing a service request is that a particular appliance or home system is not included in the plan.
Overall, the best home warranty for rental property is the one that fits your specific needs for your wallet and property. American Home Shield helps homeowners feel confident and in control of their homes.
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