Home Warranties on rentals

[Gia Hughes]

I am new to the BP community. I am in the process of buying a Section 8 rental that has a tenant under lease through June. This will be my first investment property. I was wondering what people's opinions are on getting a home warranty for the major systems. In my primary residence I had an AHS home warranty ($45/mo). Or do you think it's better to just save up for those repairs. My plan is to save about 20 percent of rent for repairs and capital expenses each month. The current rent is $1046, making reserves for repairs $209. After expenses, including property management...if I go that route...cash flow would be $206. In essence, I am considering diverting cash from the repairs reserve and paying for a home warranty. Maybe this is a good idea for the first year or two. I should have $5k - $10k in savings already just from saving money from my regular 9 to 5, but that is my personal savings. In your opinions, is it a waste of money or a good idea to start with a home warranty?