Home Warranty Questions - Newbie Chicagoland Investor!

[Patrick Roob]

Hey everyone!

First of all, thank you in advance for your suggestions and words of wisdom!

6 Months ago I had purchased my very first investment property (4-unit row home) and I am continuing to struggle in deciding whether to purchase a home warranty on the units or not... Long story short, I have purchased a four unit which was built in 1999 (17 years old) which has all original equipment. Although the furnaces are still in good working order, the AC units are on their last leg.

In my area, a home warranty will cost roughly $2,400 (600 per unit) Which should cover issues with appliances, HVAC and other miscellaneous areas not worth mentioning. Because each A/C unit is R-22 Freon, if one unit goes, I would have to spend roughly 3k-4k  (per unit) for a replacement as R-22 is no longer available per EPA requiring a complete replacement including the coil located in the furnace. This is more costly, as it's much more labor than the simple replacement of an exterior A/C unit. 

Although the cost of a home warranty would cost less than one A/C replacement, I have been reading many horror stories of warranty companies being very difficult to work with, charging additional fees, deferring payment and work and finding any means of not holding up "their end" of the warranty agreement. What are your thoughts?

1.  Do you recommend paying $2,400 for a warranty when one A/C replacement is 3k - 4k?
2. Have you personally had any good/bad experiences with a home warranty?
3. Do you recommend a specific warranty company?
4. Do you have any experience in warranties being honored in the Northern Illinois or Chicagoland area?

Thank you very much!

Patrick