(Newswire.net — October 18, 2021) — Most people are familiar with the concept of home insurance, which is a policy that provides compensation in the event of unexpected damages often caused by natural disasters. Home warranties work similarly but provide discounted repair and replacement services for your home’s major appliances and systems.
You can think of it as getting an insurance policy if your refrigerator stops working or your dishwasher requires impromptu repairs. In exchange for a flat annual or monthly rate, a home warranty company will foot the bill of fixing or replacing these large appliances, which can be an expensive undertaking for an individual to pay out of pocket.
If you’re a landlord, you might already be asking yourself, “is it worth having a home warranty on a rental property?” In this post, we’ll be doing an in-depth analysis of the pros and cons to help us answer that question.
Pros of Purchasing a Home Warranty
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Reliable professional assistance
One of the most significant benefits of purchasing a home warranty is that when something breaks, you’re sure the best hands will fix it. There’s hardly any cause to worry about when the heater stops working, the pipe starts leaking, or any other mishaps occur in the house because solving it is as easy as calling your service provider.
This benefit stands out as a massive plus for landlords with multiple properties, where one or two things are bound to go wrong, or a homeowner who isn’t handy when fixing up a house. Even more, experienced property owners could use the assistance of an expert when the damage is beyond what they’re equipped to handle. So the benefit of relying on a professional who can assess and repair malfunctions is appealing to everyone.
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It helps you budget
Another benefit of a home warranty is that it helps you budget more efficiently. Homeowners will find it easier to pay a monthly premium instead of looking for loose funds when something needs replacing. Rather than waiting for a chance to dictate your finances, home warranties let you take planning into your hands with the assurance that emergency repairs won’t come out of your pocket.
Also, the more extensive your package is, the larger your security blanket. That means you’re less likely to be caught off guard by maintenance expenses, making your budgeting more accurate. It’s helpful to keep in mind that determining your budget is an excellent tip for investing in real estate.
Of course, it’s still a good idea to have an emergency fund if your package doesn’t cover your needs.
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It can help you save
The domino effect of the previous point is that it helps you save. When you can budget more accurately, that means you can save more. Home warranties protect you from unexpected emergencies eating into your savings because their contract includes a wide array of replacement or repair services.
Another way home warranties help you save is that service calls come at a discount. Companies that offer home warranties engage the services of a specific plumbing, electric or other company. These service companies, in return, offer a discount because of the frequency of their service. So, in the long run, you’ll find it’s cheaper to replace your HVAC unit with a home warranty than through an independent contractor.
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Multiple service coverage
One of the major benefits of buying a home warranty is the multiple service coverage. Even the most basic contracts often cover different scopes of operational malfunctions. Rather than seeking the assistance of an independent plumber, electrician, or another type of technician; you can have access to all their services at a discount.
Depending on your contractor, you could also expand your coverage to include kitchen fixtures, pool maintenance, and other upgraded services.
Cons of Purchasing a Home Warranty
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Limited decision making
A major turnoff for homeowners when considering buying a home warranty is that you have to relinquish some control. Customers usually have limited decision-making power regarding operational malfunction, and the warranty provider has the final say.
If you have an air conditioning unit or dishwasher you feel is obsolete and would instead replace it, you might not have that luxury. Many home warranty companies would instead save money where they can and decide to repair rather than replace an appliance that works. Thus, property owners might have to settle for less frequent upgrades and less efficient systems in their homes.
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No choice of repair service providers
Most home warranty companies engage the services of specific businesses to attend to their customers’ needs. They might employ a particular electric company to do all their electrical work. While this choice benefits from giving warranty owners a discount, it doesn’t guarantee the best service.
Home warranty companies might decide to opt for the cheapest option in a bid to save money, and the services of the provider they engage may be barely sufficient. To save money, you might have to forfeit the services of an expert company you have a prior relationship with if they aren’t in your warranty company’s network.
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Specific policies may not cover your needs
Home warranties are rarely a blank cheque when it comes to maintaining your home’s appliances and systems. As we previously highlighted, they often favor fixing over replacing. But apart from approving replacements only when necessary, your contract could still exclude repairs to some appliances or in some situations.
Home warranties rarely cover damage to your appliances from unforeseen events related to the elements. So you might not even be eligible for a replacement if a machine is rendered obsolete by water, fire, or wind.
Also, it might be hard to find a home warranty that covers certain types of houses. Mobile homes, rental properties, and hostels are sometimes excluded from the company’s package.
Conclusion
Home warranties are a security blanket against the malfunction of your major appliances, but they also have significant drawbacks. Either choice is a gamble, so you’ll have to decide based on specific criteria. You could ask yourself questions such as how reliable are your appliances? What is your budget? And will your property manager work with your home warranty company? After answering these and researching your best options, you can then decide what is right for you.