Extend Warranties on Appliances???

Question

I just bought my first rental property and I've been pricing appliances. One thing I noticed is that many appliances offer an extended warranty that starts after the manufacturer's warranty expires. I never buy these when the appliances are for my home, but I do see how they could be beneficial for a rental property. I don't expect my tenants to intentionally break the appliances, but I know that they will not take care of them as if they had bought them. So my question is in the case of rental properties are the extended warranties worth buying? Specifically for a washer and dryer and kitchen appliances.

Keeya WangJones · Answer

Great thread on warranties!! I was struggling with this subject. I didn't know if it was worth buying warranties on appliances for my very first rental property (large studio rental) - (main unit) house hacking. I did not purchase warranties and tried to purchase decent name brand products like GE. So I found great deals for GE today and this post was perfect to decide whether I needed warranties on the big items, such as washer and dryer, cooktop, and fridge. My rehab cost to make this studio rental went down $500! And when I think of the total cost that is just warranties was an additional $500...it did not pencil out. The cost I would spend on warranties was equal to just purchasing a new appliance if it breaks down. $2000 worth of appliances + $500 in warranties was crazy!! So my high-end rental is back down to my original appliance budget of $2k for both main house and studio rental. I was able to take care of both properties for $2k!

Thomas S. · Answer

Extended warranties are a waste of money. They are simply a upsell that will not pay off. Your better option is to buy units used, a couple of years old cost usually under $200 each, and replace when they fail. If you have several rental units having a couple of spares is always handy as good used ones may not be readily available when needed.

Baseemi Iqbal · Answer

I am not a fan of extended warranty. New appliances are usually covered for 1 year so if your unit has a manufacturing defect, you will know in a year. You can find good deal on new and refurbished appliances if you do a little research. Feel free to connect if you are looking for appliances.

Andrew Johnson · Answer

@Stephanie Hairston Quick answer: No! It will just be your luck that whatever that tenant happens to do will somehow violate the extended warranty. Even if you had a great tenant the ROI just isn't there. As others have suggested, go to scratch-and-dent route. Or my personal favorite: head over the Sear Outlet (or your equivalent) and look for whatever is randomly left over. You don't need to have the brands match for a rental property. As long as they are all white/black/SS/etc. you should be fine. And that goes double for a washer/dryer, they don't have to match anything as they're behind closed doors.

Natalie Kolodij · Answer

What I've learned is many places here that sell refurbished/rebuilt applicances include a warranty on them. Otherwise why would people want used things right? They want the assurance of knowing they were really repaired. In my experience many things that are repaired/rebuilt are almost better than new because any known factory quirks/issues may now be repaired. I would find a reputable shop that buys/fixes/sells appliances and offers a warranty and look through purchasing from them. Often they're local businesses and more willing to honor the warranty aspects as well too.

Stephanie Hairston · Answer

Thanks so much you guys. Since the appliances are new, I will just rely on the manufacturer's warranty and not buy the extended warranty.

Randy Landman · Answer

Typically for a rental If I have the time to shop around I buy used or an open box item (scratched, dented, returned, floor model, or discontinued) and don't worry about the extended warranty. But if I'm tight on time then I just check for the best sale at the moment and take that, again no extended warranty. If I had room at home to keep a few cheap spares I would, but I like my garage too much. I have a spare garage I could use for that purpose, but I make more money renting the garage out than I would save in appliance costs, so I'd rather let HD store them for me until I need one. I did buy a extended warranty for $50 one time on a hybrid hot water. The technology was new and unproven, so they were offering the warranty cheap. It paid off because the element shorted out the control board twice. So other than new technologies I would avoid the extended warranty (and also avoid hybrid hot water heaters).

Jeff B. · Answer

I don't buy Extended Warranties for anything!

Kari Piecuch · Answer

I agree. My appliance repairman can typically fix the issue for equal to or less than the deductible on the warranty.Plus, you have the issue of keeping track of your warranties and then specifically going through the warranty company for each issue.

Jeffrey VanGilder · Answer

I work for a hvac contractor and we deal with home warranty companies. Sometimes they do not cover full replacement depending on various factors. Just make sure you know exactly what is covered and when coverage stops or becomes pro rated. Most extended warranties are not worth it in my opinion. Best of luck to you.