single biggest headache for investors of rental property are
repair-related items. Depending on the condition and age of the
investment home, these costs can add up quickly throughout the course
of a year. Some property management companies estimate that an owner
can expect to spend up to 15% of the rental value of the home on
repair related issues. This is especially true early in the
ownership process – when many problems unforeseen to the investor
prior to purchase tend to surface.
way to abate the costs of upkeep on a rental home is to add a Home
Warranty Policy. While it's important to understand how these
policies can help you as an investor, it's also useful to understand
their limitations. Make sure that you review your Home Warranty
quote with your home inspector prior to the end of the option period.
A good inspector will point out the deficiencies in your homeowner
policy, and greatly reduce the chance that you encounter a “gotcha”
scenario later when it comes time to submit a claim on your policy.
& Limitations to Home Warranty Policies
Cash – Repair expenses for major systems
can add up quick. When something as vital as a major system stops
working, a home warranty will limit how much you have to pay to have
a Professional – Sourcing a reliable professional can
be tricky. A home warranty can help ensure that you're getting
professional service from a reputable, licensed & insured
that home warranty service providers are vendors of the Home
Warranty Company, not necessarily the consumer. They will monitor
which items are covered under your policy, and tell you if another
item is not. They may also report items back to the Home Warranty
Company, such as deferred maintenance or non-coverage items that
could lead to reduced, limited, or dropped policies.
Pricey Appliances – Appliances can be expensive to
fix. Most home warranties cover appliances critical to the function
of the home, and employing a Home Warranty can definitely save you
some money when it comes to fixing these items when they break down.
appliances are indeed covered under Home Warranty Policies.
However this sometimes only applies to those items in use within
the functional area of the home. Meaning that if you have a
freezer in a basement area or a refrigerator in the garage, there
is a chance that these items would not be covered under your
policy. Always check the fine-print on the appliance coverages to
ensure that you're not caught off-guard later in finding out that
only some, not all, of your appliances were included in the policy