As a rental property owner, you may be wondering whether it’s a good idea to get a home warranty. We advise against purchasing a home warranty, and in today’s blog, we’re going to tell you why.
Coverage Issues
A lot of times, the warranty you buy doesn’t cover what you need it to cover. There are exclusions and exceptions that many owners don’t realize are part of the warranty until it’s too late.
Time and Money
Warranty vendors often require someone to be at the property to give them a check when they make a repair. These vendors aren’t always good at setting a specific appointment time, so there’s often a window of four hours or sometimes a window that lasts all day. We will need to send someone out to the property to wait for this company to show up. We have to pay that person, therefore you have to pay that person and it can get expensive waiting for a vendor to come and make the necessary repairs.
The warranty vendors you’ll need to use don’t always have the same urgency to get there and make the repairs quickly like our vendors do. We don’t have any leverage over them, so there isn’t a hurry on their end.
Impact on Tenants
We had a situation where the gas company red-tagged a gas furnace in one of the properties we manage and said it couldn’t be used. The property owner did have a warranty, so we called the warranty company. They said they would send someone out. It took several days for their vendor to get to the property and then once there, they said there was nothing wrong with the furnace. We had to call back and explain to them that the furnace had to be repaired or replaced in order to meet legal requirements. The warranty company said they would send another company out. While we were waiting, the tenants were getting angry because they were cold. They said they couldn’t stay in the property without a working furnace, so they wanted free rent and hotel expenses and other accommodations. We couldn’t get quick service from the warranty company because they weren’t our vendors. We finally did call our own vendor and got the work done just under the deadline that we had under Tennessee law. Still, we were left with an angry tenant. Having a home warranty can leave you with unhappy tenants, and unnecessary expenses.
A good property manager with excellent relationship in place will be far more valuable to you than a home warranty. If you have any questions about this, please contact us at Browning-Gordon Property Management.
