Home warranty vs capital expenditures.

[Kevin Kite]

I am looking at a 1700 sq ft 3 bed 2.5 bath SFH that rents for $900 a month. I was running some numbers and figuring in capital expenditures on a home at 10% since the home is on a sound foundation, built in the late 1980s, had the roof replaced 5 years ago and has a brand new water heater. Maybe that number is high but I was trying to be cautious.

I found out the current owner is using a home warranty that costs $550 a year and $75 a service call with free repairs. 

I have seen little talk about using home warranties on rentals. Is it worth it?  If so, how much should I budget for capital expendatures if I also have a home warranty?

In my situation 10% cap exp = $90 a month. 

Or home warranty with one visit a year is $52 a month. 

Thoughts?