I recently bought a 2 unit rental property in Oregon and I live in California. I was thinking of purchasing a home warranty because my property is in Oregon. Does anyone have any experience with purchasing a home warranty like those provided by 24-7 Home Warranty ? I’d really appreciate any recommendations or personal experiences with home warranties. Thanks.
Hi,
The best Home Warranty programs I have found are:
- Sensible Home Warranty
- American Residential Warranty
- Colonial Home Warranty
- Choice Home Warranty
Another good one is American Home Shield!
GR
Mine paid for itself within 3 weeks. I will always get one.
I had a home warranty on my last personal residence–American Home Shield. Sure enough, the AC unit had to have major reconstructive surgery within 6 weeks. AHS paid about $900 for that repair. I was happy.
So then why have I never bothered buying a home protection plan for a rental?
I figured that the bookkeeping part would be a nuisance, and those few hundred dollars that the warranty cost was better saved for the real repairs that were bound to be needed. With no paper exclusions.
Furnishedowner
Any time a contractor comes to your building, they have a conflict of interest. You want to spend as little money as possible for the highest quality that you can get. They want to sell you as much material and service as they believe that you can afford.
So, take Furnished Owner’s air conditioner as an example. If the landlord has a home warranty, then the company has the same interest as Furnished Owner, namely, how can I get this thing to work for a long time for a small amount of money? They’ve already made their $500 premium or whatever it was, now they just have to fix that air conditioner to run from now until doomsday for a matter of mere pennies.
Now, take the opposite circumstance. The air conditioner repair man comes out, and there is no home warranty, this is just a service call.
Then a tenant pops off with some remark about “hey this is Steve…the owner of the property…”
“OOOoohhh the AC repair guy thinks, landlord, huh? Looks like he’s going to need a new system. That’ll set him back 7 grand…”
You see the conflict of interest? So, I think home warranties are worth it, depending upon what you think might go wrong with your property, and how much you think it will cost.
I have a few properties with and some without.
One property had an AC problem which the warranty covered, another with a water heater that blew.
Generally, I like to do all the work and repairs myself to ensure it’s done right and for the right price, however sometimes it gets overwhelming for me, that’s the biggest reason for me having the home warranty’s, although now that I think about it more, it does seem to make sense to have it, especially if you have older homes.
—Mike
I agree with CalRehabber. When I buy my houses I make them perfect. Everything is new. All my appliances are new and under warranty or have significant life left in them. A warranty would be waste of money. After about 5 years I look to sell my houses anyway (that keeps me out of doing big capital repairs like roofs etc). I usually put the warranty on the houses after about 3 years.
It’s interesting learning other landlords’ strategies. We all customize for our area, budget, and expertise.
I try to do the minimum, but tastefully. I have working appliances that are gold, avocado, bisque, and white. Just one stainless dishwasher. As long as the appliance is not rusted, and it works, I keep it. One refrigerator is maybe a 1935 Frigidaire; has a rounded top. The tenants think it is very cool. No one complains. When I have to, I buy new, otherwise used.
I am not flipping, so I try to just get the unit up and rented and pulling in dollars. Yes, there is constant maintenance. We are always calling the appliance repairman, plumber, handyman and locksmith. But that is just because we have about 30 furnished houses, so something goes wrong every week.
My tenants want a clean, working, tasteful place to live. It is a temporary home for them, so they are probably more tolerant.
The home warranty plans could become a nightmare of having to figure out the paperwork. So we just pay repairs out of revenue and keep it simple.
Furnishedowner
I was putting in used appliances from the local used appliance store, but am now strongly considering new. It got to the point where I can now get a new stove for about $100 more than the used store so it’s probably worth it to just go new.
I try to freshen places up if they need it. One of these 3 new houses we got was pretty much move in ready, but had some hideous wallpaper in the kitchen and utility room so that came down.
One thing I ALWAYS do no matter what is go thru and replace every single light switch and electrical outlet in the house. You can buy the contractor packs of the switches, outlets, and covers. Each switch or outlet you do costs less than one dollar. It’s new and all white. I’ve had too many outlets fall apart in my hand as I changed them out to not do this.
Good tip, justin. We’re real fussy with anything electrical, too. We also switch out old nasty electrical outlet covers as an easy fix.
Furnishedowner
I tend to purchase lightly used late model “higher end” appliances for my rentals and will be doing so for my flips in the future. For my latest rental I bought a 3 yr old stainless GE Profile side by side fridge for $125, a 1 yr old stainless Whirlpool dishwasher for $125, a 2 yr old stainless GE freestanding gas stove for $125 and a 2 yr old stainless interior Kenmore dryer for $100 (I had an older but good condition washer with a stainless tub “donated” to me by a friend). All were bought locally from craigslist. I start shopping craigslist for appliances the day I purchase a property since the best deals come and go on a regular basis. I do major rehabbing to my properties to get them into nearly new condition before renting (or selling) and do nearly all my own repairs so warranties aren’t that important. But then, I’ve currently only got 3 properties to worry about.
jmd_forest