Is a home warranty on a rental property economical

[Beau Pearson]

Is it economical to purchase home warranties from companies like Home Shield for rental properties? Has anyone done the math on it?

[Will Gaston]

@Beau Pearson It sounds like an excellent idea on paper but I've tried this before and I'm not a fan. Home Warranty companies are essentially selling you insurance and they have an incentive to deny claims. 

The other practical aspect of this is that you're completely on their time frame. 

I once had a hot water heater die and I had to wait six days to get it fixed. The reason that American Home Shield gave for it taking so long is that they had to order the hot water heater from a remote supplier because it was cheaper than what they could get in town.

I don't want to six days without hot water and so I don't expect tenants to do that either.

I'd recommend placing the money in a repair/cap ex account instead. Use your own contractors and do it on your time frame.