Rental properties come with their own challenges and it is important to prepare for all possibilities. You must protect your investment for the breakage of appliances that are used daily because the cost of repairing or replacing them can be costly.
If the rental property is relatively new and has appliances, they are most likely covered by the manufacturer’s warranty. For older properties with questionable appliances and services, it might be a good idea to investigate a home warranty contract.
If you have more than one rental property you will have to ensure each property separately. It is a smart decision to have home warranties in place in case of unexpected major expenses. Property owners will also find that having home warranties in place will keep them in compliance with federal, local, and state laws. Apart from the compulsory house insurance, that property owners need to have in place, home warranties will also give peace of mind for all major appliances and services that are used in your investment properties.
What Do Home Warranties Cover?
Companies that offer home warranties for rental properties usually accept all types of homes including single family homes, duplexes, townhouses, and apartments. Generally, home warranty companies are cautious of homes that share piping and wiring.
Most home warranties are renewable on a yearly basis and cover all functioning systems such as electrical, plumbing, air-conditioning installations and septic tank. Major appliances in the kitchen and laundry are covered and you can always obtain coverage for electronics, central vacuuming systems and more.
How Are Repairs Made?
The warranty company will send out a technician and the policy holder pays the service fee for each claim. Because the policy holder is not the resident, arrangements to pay the company direct must be made, as most of these companies will not send out a technician without being paid first.
Is the Cost of a Home Warranty Worth It?
To determine if a home warranty is worth the cost, you must calculate your break-even point. This means that you will have to evaluate if the warranty cost will exceed the cost of replacing any of the major appliances or services.
Advantages to the property owner are:
Which Home Warranty to Choose?
There are several home warranties companies that offer rental property coverage. The difference between them being the coverage, and how much you can claim for each item per year. Your choice depends on cost and viability.
Acquiring a home warranty for your properties can prove to be a wise investment choice that is offset by the rents received. You will need to do some research into which home warranties are available in your rental areas, how much they cost, what they cover, and the cap they have on specific repairs and replacements.
Remember, not all warranties are created equal and you will need to do your homework to find what is most suitable for you.