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Is a Home Warranty for Rental Property Worth It?

Many landlords often wonder if they should get a home warranty for their rental property. Learn the benefits of having coverage for your rental’s home systems and appliances.

These days, you need to do everything you can to maximize your money and make it work for you. That means making the right investments to grow your wealth over time—and making smart moves to protect those investments.

As a landlord, you need to take care of your real estate property in order to maximize your money and budget. Maintaining your real estate assets and rental properties is integral to protecting their value. 

A home warranty for rental property is a great way to help keep it running smoothly while keeping your budget intact.

What is a home warranty for a rental property?

A home warranty is a home service contract that covers your home systems and appliances when they break down due to inevitable wear and tear. Home warranty plans for a rental property take the headache out of home hassles. If a covered item breaks down, all you have to do is place a service request and a qualified contractor will either repair or replace the covered item, giving you and your tenants peace of mind.

An American Home Shield® home warranty covers parts of up to 23 home systems and appliances that breakdown due to wear and tear. 

  1. The ShieldPlatinum™ Plan covers just about everything: the major parts of 23 home systems and appliances, plus roof leak repair, one free HVAC tune-up per contract term, unlimited A/C refrigerant, and double coverage amount for appliances. 
  2. The ShieldGold™ plan covers the parts of 14 major home systems plus kitchen and laundry appliances, including your refrigerator, oven, built-in microwave, garbage disposal, dishwasher, and washer and dryer. 
  3. The ShieldSilver™ Plan covers the parts of 14 major home systems, including plumbing, electrical, and heating and cooling. 

As a landlord, you know that maintaining a home is expensive, especially a rental property. A home warranty can significantly defray many of the expenses associated with maintaining both your primary residence and your rental property. You can buy a separate home warranty to protect each of your properties. If your rental unit is on the same site as your primary residence and less than 750 square feet, select Guest Unit coverage, which you can add to your home warranty coverage within the first 60 days of membership. 

While American Home Shield doesn’t offer a separate home warranty for landlords, all homeowners—no matter if you have one or two properties—can rely on an American Home Shield® home warranty to help resolve appliance and home system breakdowns as quickly and efficiently as possible, with only the out-of-pocket costs that your specific plan prescribes.

Learn more about what's covered by a home warranty.

Why should I purchase a home warranty for rental property?

Why do you need a home warranty for a 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 or system breakdown). Learn about the differences between home warranty and homeowners insurance in our Home Warranty vs. Home Insurance blog post. Whether you live in the house or rent it out, it’s still a house, and it’s still going to incur inevitable issues with major components of its systems and appliances. Learn more about why you need both homeowners insurance and a home warranty.

As a landlord, you’re required to keep the home’s major appliances and systems in good working order so that your tenants’ home is livable and comfortable. When the A/C, heat, electricity, or plumbing goes awry at your rental unit, who does the tenant call? You. And who can you call? Your home warranty company.

Read our guide on renting out your home.

Thinking about coverage?

Sounds like a plan. Find the warranty that fits you best.

Can a renter buy a home warranty?

Tenants can buy renters insurance, but they cannot buy a home warranty; the property owner, or landlord, is responsible for carrying the home warranty at the rental property.

Careful landlords make sure all their tenants have renters insurance to protect their personal property from catastrophic loss or theft. Renters insurance will cover repairs of appliances that your tenants actually own; for example, if they bring in their own washer and dryer or their own microwave, breakdowns of those appliances would have to be covered under the tenant’s renters insurance. Breakdowns of appliances that you, the landlord, own would have to be covered by your home warranty plan—if you don’t have one, you’ll have to pay to repair or replace them completely out of your own pocket.

Should I get a home warranty for rental property if I don’t live near my rental property?

If you live in a different city or even state from your rental property, a home warranty is the perfect way to ensure your homeowners’ rental property receives qualified local service without needing you to be in the area. You can just submit a service request for the property, and American Home Shield will send a local, vetted service professional to the property to diagnose the issue.

Even if you do live near your rental property, though, you may not have the time to perform every appliance and home system repair in your rental property. Trying to find a trusted technician can be time-consuming. You don’t need to spend precious minutes asking around or rolling the dice on an unknown technician you found online. It's easy with American Home Shield. You can contact American Home Shield, who will assign a service pro to diagnose the issue through your home warranty plan.

American Home Shield® members can simply log in to the My Account portal to submit a service request.

Is the coverage the same for home warranties for landlords as it is for owner-occupied home warranties?

Absolutely. Even though you’re not living in the home, you own it, so you’re covered with a home warranty. The best part is that home warranty companies that provide flexible plans, like American Home Shield, let you tailor plan coverage to meet your needs for that particular property. Choose from three base plans with varying coverage and then select any add-on coverage you need: pool or spa, guest unit, septic pump and well pump, or roof leak repair.

Explore home warranty plans to find what works best for your rental property. Choose the best home warranty for your rental property from American Home Shield.

What should I consider when considering a home warranty for rental property?

It’s important to consider the age of the rental home and its accompanying appliances and home systems. If it’s an older home with older appliances and systems, home warranty protection is a no-brainer. Even if it’s a newer condo or house, appliances and home systems can still malfunction, especially under heavy use common in rental properties. American Home Shield covers items, no matter their age.

Another factor to consider when deciding on a home warranty for your rental property is whether or not you have more than one rental. The more rental properties you have, the more you have to manage—the cost of a home warranty may be a small price to pay for convenience. 

Also, when purchasing a home warranty, make sure you understand every detail about the warranty. What does it cover and exclude? The last thing you want to find out when placing a service request is that a particular appliance or home system is not included in the plan. 

Overall, the best home warranty for rental property is the one that fits your specific needs for your wallet and property. American Home Shield helps homeowners feel confident and in control of their homes.

What are some of the benefits of having a home warranty for my rental property?

Having a home warranty will help you control your covered repair or replacement expenses. You won’t be seeing any unexpected and surprising fees because they are outlined when you first sign up with a home warranty plan. Sure, you’ll have to pay the annual contract fee along with your Trade 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? 

Is a home warranty on a rental property tax deductible?

Since you’re a landlord, the home warranty for rental property cost may be tax-deductible—the annual premium and service fees may be considered operating expenses that can be claimed. Of course, you should verify any tax benefits with your tax professional. 

Ready to help protect your budget? Compare plans & costs to find the best home warranty for landlords.


AHS assumes no responsibility, and specifically disclaims all liability, for your use of any and all information contained herein.

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