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HOME WARRANTY


 key.  In general, a home warranty will cover certain repairs on your property (usually appliances and heating/AC, sometimes more), and when a repair comes up, you just pay a reasonable deductible ($50-$75).

 

Okay, so what are the drawbacks.  If it's an appliance-only warranty, keep in mind quality used appliances may be available at a low cost, so you might need to have 1-2 appliances replaced every year for an appliance only warranty to make sense financially (add in the furnace and water heater coverage and it's a different story).  Still, quality of service by warranty companies (and quality of coverage) varies greatly.  So here are some tips if you decide to go forward with a home warranty:

 

1. Call the company's repair line and see what hold times are like (not unusual for some companies to have 30-45 minute hold times). 

2. Check out their online reporting capability.

3. Ask who their vendors are in your area (especially plumbing and appliance), and then check those companies out on the BBB. 

4. Understand what you are getting - read the policy and know what is, and what is not, covered (even something that seems to be covered may be 'excluded', so read the exclusion section of the contract thoroughly. 

5. Expectations!  It's not unusual for a home warranty company to source an appliance or water heater from out of state, and have it shipped to their local vendor.  If your tenant is waiting a week for hot water....well, you get the picture.  

 

Home warranties for rental properties on the surface may seem like a no brainer, but understanding exactly what you are getting is key.  In general, a home warranty will cover certain repairs on your property (usually appliances and heating/AC, sometimes more), and when a repair comes up, you just pay a reasonable deductible ($50-$75).

 

Okay, so what are the drawbacks.  If it's an appliance-only warranty, keep in mind quality used appliances may be available at a low cost, so you might need to have 1-2 appliances replaced every year for an appliance only warranty to make sense financially (add in the furnace and water heater coverage and it's a different story).  Still, quality of service by warranty companies (and quality of coverage) varies greatly.  So here are some tips if you decide to go forward with a home warranty:

 

1. Call the company's repair line and see what hold times are like (not unusual for some companies to have 30-45 minute hold times). 

2. Check out their online reporting capability.

3. Ask who their vendors are in your area (especially plumbing and appliance), and then check those companies out on the BBB. 

4. Understand what you are getting - read the policy and know what is, and what is not, covered (even something that seems to be covered may be 'excluded', so read the exclusion section of the contract thoroughly. 

5. Expectations!  It's not unusual for a home warranty company to source an appliance or water heater from out of state, and have it shipped to their local vendor.  If your tenant is waiting a week for hot water....well, you get the picture.  

 

As with anything, know what you're getting and work with a reputable company if you decide to purchase a home warranty.