As a single family rental property owner, you might be considering a home warranty as a way to protect your investment and provide peace of mind. However, as your property manager, we want to caution you against relying on a home warranty for your maintenance and repair needs.
Here is a real life example of why a home warranty might not be the best option.
Recently, we had an issue with the air conditioning unit at one of our rental properties. We sent out our preferred provider first, and then, realized we were supposed to call the warranty company, so then we called the home warranty company as required. Both were called on the same day.
|Using a Preferred Provider||Using the Home Warranty Company|
|- Out of Pocket Costs - $1200||- Out of Pocket Costs - $1400 (plus 3 years of policy payments)|
|- Same Day Initial Visit||- Initial Visit Scheduled 3-4 days Later|
|- Replace Broken Component with a New One the Next Day||- Took 4 Days for Vendor to Receive Authorization from the Warranty Company to perform the work needed|
|- Authorized Only to 'Repair' Broken Component Back At Their Shop, Not Replace it.|
Total Time Tenant was Without A/C - 19 Days
So, after paying years worth of home warranty premiums, the repair still costs more out of pocket than using a preferred provider without a warranty.
This is not an isolated incident. Many property managers have had similar experiences with home warranty companies. In fact, a quick search online will reveal numerous complaints about long wait times, poor communication, etc.
So, why is this? Home warranty companies are in the business of making money, not neccesarily providing top-notch service. They often have agreements with contractors who provide services at discounted rates, and often require them to 'repair' old components vs replacing them with new ones. Additionally, the home warranty company has to approve all repairs, which can lead to delays and frustration for both the property manager and the tenant.
As property managers, our goal is to keep our tenants happy. Happy tenants are more likely to renew their lease and take care of the property. When we use a preferred provider, we know that the work will be done quickly and efficiently, with minimal disruption to the tenant. This can lead to a positive experience for the tenant and ultimately benefit the property owner in the long run.
In conclusion, while a home warranty might seem like a good idea, it is not always the best option for property managers. By using a preferred provider, we can ensure that repairs are done quickly and efficiently, leading to happy tenants and a well-maintained property.