Should landlords buy home warranties for their investment properties?

On the surface, home warranty plans sound like a great idea! You pay a few hundred dollars per year for the peace of mind of having a fixed cost (or a least a limit in the form of a deductible) for any major repairs that pop up at your rental property! Great, right?

Not so fast! For a number of reasons, home warranty plans are generally a bad idea for rental properties. Home warranty companies often:

• Take a long time to show up.
• Send inexperienced technicians without the correct tools or parts.
• Take a long time to get parts and make repairs.
• Claim that parts are not available.
• Exclude or deny coverage claiming routine maintenance or inspections were not performed, which voids the home warranty coverage.
• Use delay tactics, hoping the homeowner gives up and gets another vendor to fix the issue.

According to Florida Attorney Harry Heist, “They’re insurance companies, and insurance companies are out to make money, not to pay out claims. If this is your own home and you want wait two or three weeks for repairs, fine. But landlords are required to provide and maintain certain amenities [such as heating and air conditioning, a common home warranty claim] for tenants, While your home warranty vendor is waiting on parts, your tenant may be waiting in a lawyer’s office, and and a judge doesn’t care about your home warranty!”

To really hear Harry’s opinion on the matter, check out the video below!