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Investing in real estate can be a great way to make money. If you purchase a home and then rent that home to a high-quality tenant, you will have a chance to make quite a bit of rental income. Owning a rental property is not all fun and games. Issues come up with the property that can cause panicked calls from the tenants.
These issues typically need to be handled immediately, and this can be very inconvenient. If you find yourself in this situation, home warranty coverage could be what you need. In this guide you will find the following:
A rental property home warranty will cover the major appliances and major systems that keep the rental property functional. Things like air conditioning, water heaters, and refrigerators are all items that could be covered under a rental property home warranty policy.
The next time your tenant calls to tell you that something is broken, your home warranty provider will send over a qualified repair person to get the issue fixed immediately. A home warranty for a rental property can cover various issues in the home that need repair due to normal wear.
A landlord who wants peace of mind when it comes to their rental properties will see tremendous benefit from the home warranty plan. Many landlords own more than one place and having to worry about finding a maintenance specialist and keeping renters happy while home repairs take place can be rather difficult.
With a home warranty service contract in place, the renter, property manager, and landlord will get up-to-date information as to when to expect a fix for the issues at hand.
There are two basic types of home warranty plans. One plan will cover appliance repairs, and replacement and another plan will cover home systems repair and replacement. In addition to these two types of basic plans, many companies offer comprehensive coverage that can sometimes be called a combo plan.
Home warranty plans come with all types of additional coverage for things that may be unique to a rental property. Here are some of the basic features of a home warranty plan:
|Rental Property Home Appliances||Rental Property Home Systems|
Real estate investors are typically looking to cut costs whenever possible. The less it costs to keep a property up and running, the more direct profit to be made. For a smart real estate investor, a home warranty can save quite a bit of money.
The first expense of a home warranty is the month-to-month cost or policy cost. You will work with your service provider to set up a plan that works for you. The price of the plan will usually be between $40 and $60 per month. A platinum plan with optional coverage could exceed the $60 per month.
In addition to the monthly fees, a rental property owner must also be prepared for the service call fees. With a service call to come and fix a broken appliance or system, you will pay a set fee covering the cost of that repair. If the repair ends up being hundreds of dollars, your warranty policy will cover it.
All plans come with coverage limits, and it’s important to pay attention to those when you are reading the fine print on your service contract.
Now that you understand the importance of the home warranty for a rental company let’s look at the four best options out there.
Choice Home Warranty does a tremendous job of combining quality, attention to detail, and simplicity. When you look at the two plan types that Choice Home Warranty offers, you will very clearly see what is covered and what is not.
In addition, Choice Home Warranty is known for having an extensive network of high-quality service and repair people. These people come highly recommended, they work quickly, and they know how to work with a home warranty policy.
When choosing a home warranty for a rental property, you will need something that has fair pricing and a simple to work with system; Choice Home Warranty is a perfect choice.
Read our full Choice Home Warranty review for more.
If Choice Home Warranty is not the best option for your rental property, you may want to look into American Home Shield. American Home Shield is a premium home warranty service provider. With AHS, you will have the ability to customize your plan and your payment. Certainly, this is not something that a homeowners insurance policy would offer a rental property owner.
American Home Shield has a customizable service fee that will allow you to control the monthly expenses on your home warranty. The plans are also easy to customize if needed. If you find that there are some items on the systems plan that you need and others you don’t, you can put together a unique plan taking care of the home services you need the most.
American Home Shield has a large network of professionals, speedy response times, and premium coverage options. You will pay a little more for this plan, but the home warranty covers quite a bit.
Read our full American Home Shield review for more.
As we mentioned, when you own a rental property, you must focus on operating expenses and making sure that the home still clears a profit each year. If you don’t have the proper systems and plans in place, a rental property could easily cost you money instead of making you money. Although this can be a tax-deductible write-off, most people would rather make money on their property.
Select Home Warranty is one of the best values when it comes to a home warranty plan. WIth Select Home Warranty, you will get the option for a fairly priced appliances plan or systems plan. The company even includes roof leaks as part of its premium coverage.
When you go with a more affordable plan, homebuyers can expect to see lower coverage limits and potentially fewer options for covered appliances and systems. For the most part, rental property owners have had no trouble getting the Select Home Warranty to be an affordable but practical fit for rental coverage.
Read our full Select Home Warranty review for more.
Another important factor to consider for a landlord is how difficult a home warranty company is to work with. As a rental property owner, you will have to be in constant contact with property management companies, home insurance companies, tenants, and more. All of this interaction is time-consuming and, at times, annoying.
Choosing a home warranty company that is very easy to work with, responsive, and able to answer your FAQs within a matter of minutes is essential. Liberty Home Guard is a newer home warranty company that prides itself on simple and fast customer service.
If you like dealing with a responsive company that keeps things as simple as possible, the Liberty Home Guard is a perfect choice. The better business bureau rating for Liberty is high, customer reviews are good, and their website and homeowner portal are extremely easy to use.
Read our full Liberty Home Guard review for more.
There are a few factors to consider when choosing a home warranty for your pre-existing or new home. Ensuring that you understand what you are getting into before purchasing could save you quite a bit of money in the long run.
Not all home warranty companies are offered nationwide. Make sure that the company you are interested in choosing is available in your state or general area. Rest assured, whether you own a rental property in Texas, California, New York, or Florida, there is a home warranty provider that will fit your needs.
As a rental property owner, you are going to be quite busy. Part of purchasing a home warranty is to make sure that you can quickly handle issues at your properties. A good quality customer service team that understands the need for quick response times and repairs is going to be the best choice for a landlord.
How fast will the home warranty provider fix your issues? Tenants that don’t have a refrigerator or hot water are going to be very anxious to have their needs handled.
Plan limits give you an idea of the maximum payout from a home warranty plan. If the payout limits are small, be prepared to have to chip in on expensive repairs or some replacements.
Now that you have a better idea of the best home warranty companies on the market let’s take a look at a few of the questions that rental property owners are asking. A home warranty policy is different from homeowners insurance, and the concept can take a bit of getting used to at first.
Most home warranty policies are not going to have a deductible. Instead, the home warranty has a service call fee attached to the plan. The service call fee is what you pay each time a system or appliance needs a repair. Once the service call fee is paid for, the plan starts to cover everything over and above this price.
Home warranties do not cover pre-existing conditions. If your tenant just called to tell you that the washing machine is broken, you will have to get that fixed before signing up for your home warranty plan. All appliances and home systems must be in working order for them to be included in your plan.
Even if you are not currently residing in your investment properties, they should be eligible for a home warranty plan. You can work with the service provider and let them know you have a rental property, and they can give suggestions as to how to properly cover your individual home.
Being an owner of a rental property can be rather stressful. You will have to pay quite a bit of attention to the property to make sure that tenants keep it in good shape. Between issues that come up inside the home and tenants that cause problems with late rent or that new puppy they just decided to adopt, being a landlord can be a headache.
Luckily, purchasing a home warranty can ensure that you have fewer things to worry about. When an issue is reported, you can reach out to your service provider with one phone call or online submission, and the rest will be handled.
You won’t have to worry about the money to fix the repair as the service call fee is all that you should have to pay. For rental property owners, the home warranty plan is a good choice for peace of mind and profitability.
Even though there is a monthly cost involved with a home warranty plan, you will have more than exceeded your yearly costs on the home warranty plan after paying for just a few repairs. As you buy more and more properties, repair and replacement costs continue to grow and can eventually become too difficult to manage. Use the home warranty plan to protect your investment and keep the stress of being a landlord to a minimum.
At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each home warranty provider according to our methodology.
We’ve done the homework for you and have researched over 50 home warranty companies so you can have the information you need to make the best choice for your home. Additionally, transparency and trust are our most important values for the reader.
That’s why we took the time to create an objective rating system and score each home warranty provider according to our methodology. Our team spent hours on the phone speaking to representatives from each home warranty company to get information right from the source. We also dug into the fine print on each company’s service agreement to make sure no detail was left out.
To make the most of our research, we developed a formula to objectively determine the best home warranty companies based on the following criteria:
We want to make sure we’re providing you, the consumer, with the most current data available for every home warranty company we’ve researched and rated. That takes significant effort but we feel that’s vital to providing you thorough and trustworthy reviews.
With that in mind, we have dedicated staff members who regularly update our database of home warranty research.