Buying a home warranty? Consider these 4 things
Many landlords question the value of a home warranty for their rental properties. A home warranty is a service agreement designed to cover the costs of repairing or replacing household systems and appliances. However, the specifics of coverage vary among providers and plans.
Deciding whether to opt for a home warranty involves balancing expenses against potential savings. Considerations like the property’s age and the condition of its appliances play a crucial role.
Here are four things to consider before purchasing a home warranty:
- Slow Response Times: Home warranty companies are notorious for responding slowly to service requests, often causing frustration for your tenants. Imagine a Home Warranty company taking three days to respond to an AC breakdown in the middle of the summer. These delays strain the landlord-tenant relationship and may lead to lease non-renewals due to inadequate maintenance service.
- Poor Workmanship: Another concern with home warranty providers is the possibility of poor workmanship, as they often utilize low-skilled labor to cut costs, resulting in subpar repairs that may require multiple visits for the same issue.
- Denial of Claims: Many home warranty contracts have a history of claim denial due to their complex terms and conditions. Some companies employ tactics to reject claims or shift blame onto tenants or landlords, while also imposing service fees to boost profits by paying out less than they collect.
- Time consuming: The long wait times to reach someone for a service call, along with the follow-up required to ensure repairs are completed, contribute to this. Additionally, tenants often waste time waiting for vendors to show up for repairs. When logging service requests online, most warranty companies take 24-48 hours to respond. The extended wait time is not ideal for urgent service repairs such as an HVAC unit, especially during the summer.
Instead of relying on a home warranty, some landlords allocate a portion of the monthly rent to cover repairs and replacements. The landlord can now choose his vendor, resulting in quicker responses and higher-quality work. This helps to retain tenants, reducing turnover costs, and ultimately, long-term financial savings.
If you have any questions about this or other property management matters, please feel free to reach out. We’re here to assist you through the intricacies of property management.
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