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Updated about 4 years ago,
Home Warranty instead of a Property Manager?
I still have not pulled the trigger on my first real estate investment. I recently had lunch with a buddy who is a Realtor and owns a few properties he rents. We were talking shop, I mentioned I would 100% need a Property Manager, as I am not in a position to take calls about clogged toilets and such.
He said for one property, don't use a property manager, just purchase a Home warranty, and give the tenant the repair number. Like "Don't call me, call this number." He said the service is like a maintenance portion of a property manager, where they contract with various trades such as electricians, plumbers, carpenters, etc. and send out whoever is needed. Often they respond in 24-48 hours.
It sounded too good to be true. I tried to think of a situation that his theory would fall apart. The best I could come up with is burnt out light bulbs, this repair service isn't going to want to come out for trivial stuff, that a normal homeowner would take care of, but a tenant might feel entitled too. I don't want to pay $150 to have a light bulb changed. He said you just write a clause into the lease about normal maintenance items such as light bulbs, items with batteries etc.
It seemed pretty iron-clad but still sounds too good to be true. The maintenance/repair part is really the only service of a property manager that I just don't want to deal with. I don't mind screening tenants and dealing with contracts, etc.
Has anyone done this before? Is it crazy, am I missing some reason why this wouldn't work?
Thanks