Home Warranty or not?

Question

I'm considering if I should buy home warranty plans for my rentals. I got a quote of $1000 for 44 months coverage with a deductible of $45 each claim. Is it worthwhile? Or just pay the repair cost when something breaks? Thanks.

Account Closed · Answer

ABSOLUTLY, no question, I would buy a Home Warranty!

You just have to know how to work them to your maximum benefit.

I've seen borrowers work the warranty companies like an 1850s government mule and run up massive repairs requests!

I used to sell them back in the day and one client had purchased a $995 warranty and put in approx. $60,000 repair requests.

Also, they use independent contractors who will do what they can to replace what they can get away with charging the warranty companies.

Remember, the warranty companies make money on the majority of the people who purchase warranties and never use them.

Matthew McNeil · Answer

One of my true regrets was buying home warranties on my properties.  Sounded good initially, but realized after a couple years its a waste of money.  Desperately tried to cancel the warranties I had with a major national company, but they did everything in their power to hide how it could be done.  I finally sent a letter to their headquarters accusing them of intentionally trying to make it difficult for people to cancel.  I made Cc notation at the bottom advising them that I'd sent a copy of the letter to the state attorney where my properties are located.  Warranties were cancelled immediately!

Terrell Garren · Answer

Agree w/ @Mindy Jensen The better option is to build relationships and trust with a core team of contractors and handymen. E.g. HVAC, plumber, electrician are the top priority. Then, general contractor, roofer, painter, carpentry trim, general handyman.

Mindy Jensen · Answer

@Yan Guo , in my experience, they aren't worth the paper they're printed on. Everything has a fee, whatever breaks isn't covered, and if it is, you have to use their service guys.

Mostly, whatever breaks isn't covered. Save your money.

Chris C. · Answer

I can't stand my home warranty, but that quote sounds pretty good. How many units does it cover?I found that when the appliance hits it's natural expiration date, it made more sense to just replace the appliance instead of repeatedly calling the warranty, who will fight you tooth and nail to NOT replace the appliance. My two cents. It's great if you aren't expecting anything though, since some jobs can cost way more than 45$ + the upfront 1000 fee.