Should landlords buy a home warranty for rental property? Learn the benefits of having protection for home systems and appliances for your rentals.
As a landlord, it’s obvious that you have an interest in investments and making money. But have you thought about capitalizing on something just as important: helping to protect your budget when it comes to those investments? A home warranty for rental property can do just that.
Why should I purchase a home warranty for rental property?
For the same reason you need a home warranty for your personal residence: Obtaining a home warranty is probably one of the smartest investments you can make for any property. Why? Because your homeowners insurance only covers what could happen (like a fire or flood). A home warranty, on the other hand, covers what will happen (like an appliance breakdown). Regardless of whether you live in the house or rent it out, it’s still a house. And it’s still going to incur those inevitable issues with major components of its systems and appliances. With a home warranty, you can rest assured that covered breakdowns will be resolved as quickly and efficiently as possible, with only such out-of-pocket costs as your home warranty prescribes.
Is the coverage the same for a “landlord home warranty”?
Absolutely. Even though you’re not living in the home, you own it, so you’re covered. The best part? Home warranty companies that provide flexible plans, like American Home Shield, let you tailor a plan that meets your needs for that particular property. Does the property have a dishwasher? A pool? Are the tenants responsible for providing and maintaining a washer and dryer? You can determine what needs to be included in the home warranty and what’s superfluous.
What should I consider when deciding about a home warranty on rental property?
It’s important to consider the age of the rental home and its accompanying appliances and systems. If it’s an older home with older appliances and systems, home warranty protection should be obvious. Also, make sure you understand every detail about the warranty. What does it cover and exclude? Will you be the one contacted by the person contracted to do the repairs, or will he or she communicate directly with the tenant? How is the service call fee paid (billed to you, collected from the tenant at the time of repair, etc.)? If applicable, see if the company will work directly with your property management company.
What are some of the benefits of having a home warranty for my rental property?
As a landlord, you’ve placed a lot of responsibility on your shoulders. Why add to that weight by spending time worrying about finding and scheduling repairmen, electricians or plumbers when covered breakdowns occur at your rental property? Let the home warranty company handle that. Also — and this is especially important if you own multiple rental properties — having a home warranty in place will help you to control your covered repair or replacement expenses. Sure, you’ll have to pay the annual contract fee along with service call fee(s), but that can be a drop in the bucket when it comes to paying for repairs or all-new items that might have been covered by the warranty, right? Another bonus? Since you’re a landlord, the cost of the home warranty on the rental property may be tax deductible — the annual premium and service fees may be considered operating expenses that can be claimed (of course, you must verify any tax benefits with your tax professional). That certainly could help, right?
Ready to help protect that budget? Check out how flexible an American Home Shield Home Warranty can be.