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Does anyone have experience using a Home Warranty company on a rental property. I'm wondering if they are worth the money and looking for recommendations. I was researching American Home Shield which was about $45 a month and there is a per visit charge of $75-$125.
No, no, no, no, not worth it. And a pain in the rear for rental properties, as the deductible is due at the time of service. Just put the yearly amount into an account for repairs.
We paid $600 per year for 10 years on our rental (plus 7 years when we lived there) solely to "get our money back" when the HVAC died (which was likely 10 years ago). Well, it went, and it only covered 1/4 of the cost (fine print).NOT WORTH IT!!
Does anyone have experience using a Home Warranty company on a rental property. I'm wondering if they are worth the money and looking for recommendations. I was researching American Home Shield which was about $45 a month and there is a per visit charge of $75-$125.
Does AHS, or any of the others, actually provide warranties for properties that are not owner occupied? Does their contract specifically state coverage for rentals is available?
Does AHS, or any of the others, actually provide warranties for properties that are not owner occupied? Does their contract specifically state coverage for rentals is available?
I use AHS on multiple rental properties. They are happy to collect premiums and service call fees. I recommend that LL self-insure if financially able. The argument to set aside what you are paying in warranty premiums for repairs is a nice approach as long as an HVAC doesn't blow up when your repair account only has $400 in it.
I am within $300 of break even on warranty premiums and service calls vs. out of pocket to handyman/property manager/trades. I've tracked expenses and repairs over 8 years on this one property to make sure the warranty is working for me. Yes, I am down $300 over 8 years vs. paying cash per repair. I accept this loss as insignificant. One of my HVACs has been on life support for a few years and will need replaced earlier than its life expectancy.
Go into it with eyes open. Warranties make their money by authorizing the cheapest (not always cost-effective) repair, by a contractor you do not vet yourself. AHS, just like the average property management company, will advertise they save you money because they get insider rates or only use "top-rated" whatever. Neither care about saving you money.
And it is not just home warranty companies....I had an original product warranty issue with a dishwasher. It took 9 weeks for the manufacturer and its minions to repair. First guy comes, diagnoses the wrong thing, orders an expensive circuit board which kills 3 weeks on back order. Then another week to reschedule, and dude is back, hooks it up, runs a cycle, works and leaves. A day later it is not working again. Call. Different contractor, young man, pulls out ipad, reads the service update, orders a completely different part because the service update showed that a faulty part was killing circuit boards. Been working fine since (over 2 years now). So, an older guy with 20+ years experience doesn't bother to do any homework or a kid with an iPad? Most of us would trust the old dude. That is why trusting a warranty or property management company to do anything is far riskier than vetting people yourself and holding them accountable for their work.
If I lived within 30 miles of my properties, I would self-manage and self-insure repairs. If all goes as planned, I will be out of the LL business in a few months.
Thanks for your replies. The reason I am considering a home warranty company is because my go-to handyman has moved away and I find myself scrambling to find reliable people. I needed a plumber several months ago for a fairly minor repair and no one wanted to come out. I contacted six before I reached one that would do the job at an exorbitant price. I was thinking that being able to just make one call would be worth the price alone.
Thanks for your replies. The reason I am considering a home warranty company is because my go-to handyman has moved away and I find myself scrambling to find reliable people. I needed a plumber several months ago for a fairly minor repair and no one wanted to come out. I contacted six before I reached one that would do the job at an exorbitant price. I was thinking that being able to just make one call would be worth the price alone.
The big trouble with warranties is that you’re adding /multiple/ layers of denial and “permission” between the necessary repair and your tenant. HVAC goes out on Friday at 6pm, your tenant wants it fixed nownownow.. sure, legally you might have xx business days, longer if the temperature is “only” xx degrees - depending on state/local laws, but the bottom line is, the guy who finally comes out to fix or replace it is going to need permission before he can order parts and make repairs.
Add to it the fact that you know the only “approved” contractor is going to be the cheapest available. If it takes two days to get permission, and three more days to get parts, and the service guy is “busy” when the parts come in, can’t get to you for a couple more days.. (the service guy is going to be repairing whomever pays more first, if he’s overloaded)..
It’s a big mess, and it doesn’t need to be. The landlord is the one who will get the blame- charge market rent, establish a generous emergency fund per unit, and hire grown ups to do repairs promptly and properly. It’s the only way to do business.
Thanks for your replies. The reason I am considering a home warranty company is because my go-to handyman has moved away and I find myself scrambling to find reliable people. I needed a plumber several months ago for a fairly minor repair and no one wanted to come out. I contacted six before I reached one that would do the job at an exorbitant price. I was thinking that being able to just make one call would be worth the price alone.
Nope.
Nobody wants a small job because it takes a lot of time. This is one thing people dont understand. As a tradesman and a firmer business owner I can tell you that I turned away a lot of work where I had people literally say “must be nice not to need money”. Truthfully doing a job for them was a losing proposition for me.
I have a set cost of sending out a repairman. And to do your job for the $90 you see as “good money” I just lost $320 because I could of sent that same electrician to a different job site where I could change 4 hours rather than one or two. The reason a exorbitant price is charged is because to do it for less means the guy is losing money.
I would start looking for handymen and start vetting them and their work
Location: Formerly Pleasanton Ca, now in Marietta Ga
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I had AHS for my home. Dropped them for poor performance and response time. I had it on one of my rentals but I figured if they gave me poor performance, they would do the same on the rental and I don't think it's fair to put the renter through the crap I went through myself.
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