A lot of property owners ask me: should I buy a home warranty? Today, I’m sharing what I think about home warranties and why they may or may not be cost effective for your rental property.
Pros and Cons of Home Warranty: Single Family Homes
A home warranty is a great idea for single family residences or duplexes. In these cases, home warranty coverage can save you money when something needs to be fixed or an appliance needs to be replaced. Landlords may benefit from purchasing a warranty when there are only one or two properties to cover.
Home Warranty for Rental Property: Multiple Properties
However, if you are an investor with a large portfolio of properties, you might want to reconsider buying a home warranty. If you have more than four or five units, having this type of protection might be overkill. Many times, you’ll find that not all appliances will go bad at the same time. It’s probably more cost effective for you to send a repair person to do the job and take care of maintaining your properties. Investors with multiple properties often get discounted rates from vendors and contractors because of the volume of business they provide. That will save you more money than a home warranty would.
There’s still a lot more to tell you about home warranties. If you have any questions about whether a warranty would make sense for your personal situation, please contact us at California Pacific Realty. We would be happy to tell you more about Oakland property management.
