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Should I Put a Home Warranty on My Rental Property?
July 23, 2021
We know you’re interested in keeping maintenance and repair costs down. It’s an important part of building ROI on your investment. A lot of landlords and investors ask about home warranties. Maybe you have one on your own home, and it works out well.
However, you’ll find that most
San Francisco property
management companies advise against a home warranty.
Local property managers know that these warranties won’t do much for you when we’re talking about a home that you’re renting to tenants. Warranties actually tend to cost more time and money, and they almost always lead to frustration for you and your tenants.
Here’s what we’ve found can often happen with home warranties:
- Communication is lacking
- There’s no sense of urgency
- Vendors don’t always impress us
If you have a home warranty in place right now, we’ll work with it as best we can. However if you’re trying to decide whether or not to buy one, we recommend against it.
GOOD MAINTENANCE POLICIES VS. HOME WARRANTIES
With preventative maintenance programs and
routine inspections, you can do much better for your investment property than a home warranty. Let’s take a closer look at what they really include.
1. WARRANTY COMPANIES AREN’T GREAT AT COMMUNICATING WITH SAN FRANCISCO PROPERTY MANAGEMENT COMPANIES
You buy a home warranty expecting that when something in the property breaks, the warranty company will replace or repair it – at no cost to you.
That’s not always what happens.
Bad home warranty experiences start with bad communication. Most warranty companies are slow to respond when a claim is filed. We’ve also noticed a lack of transparency between the warranty company and everyone involved; the property owner, the property manager, the tenants, and the vendors.
You may have to wait two or three days just to get a vendor from the warranty company out to assess the problem. That doesn’t mean it will be fixed in those two or three days; typically the vendor has to report back to the warranty company before any work can begin. This is problematic if there’s a habitability issue that needs immediate attention.
2. DREADFUL DELAYS IN MAKING REPAIRS AND RESPONDING TO MAINTENANCE
Safe and habitable San Francisco rental properties are non-negotiable. You have to provide a well-maintained property for your tenants to rent. As property managers, we prioritize responding to
maintenance concerns and repairs, whether they’re emergency issues or routine problems.
Warranty companies do not move so quickly.
Waiting for a home warranty company to complete work in a timely manner will damage your relationship with your tenants and may put your property at risk. They do not work quickly, and there is no sense of urgency.
As you know, providing a great customer experience is one of the most important things you can do when renting out a home. With habitability issues come legal issues. Tenants have a right to live in a home with heat. They need running water and safe electricity. Making them wait for repairs that could be taken care of by our team of vendors in a day or two is not a great way to do business.
3. SAN FRANCISCO PROPERTY MANAGEMENT COMPANIES CANNOT CHOOSE VENDORS WHEN WARRANTY COMPANIES ARE USED
We pride ourselves on using the best vendors and contractors we can find. We have established relationships with these professionals, and we benefit from their attention to our properties and their preferred pricing.
Unfortunately, the vendors a warranty company will send over are not always the best. Their job, when they’re working for the warranty company, is to complete the work as cheaply as possible. That can lead to faulty or incomplete work. Using cut-rate vendors is a great way for home warranty companies to save money, but it’s a terrible way to protect the condition of your investment.
Here’s what we suggest.
Read the fine print of any potential home warranty plan. You’ll realize that not everything you expect to be covered will actually be covered. There’s very little value to be found in a home warranty, even if you buy an older home.
GET HELP WITH SAN FRANCISCO PROPERTY MANAGEMENT
Good San Francisco property management is more valuable than a home warranty. You can be you’re your investment is protected, and you’ll know your tenants are having a great rental experience.
Talk to us before you buy a home warranty. We’ve been doing this since 1987, and we know how to bring you the best in San Francisco property management.
Author - Kelli Smith
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