Choosing a rental home warranty for your Santa Rosa investment property is extremely important. That’s because there are some really bad warranty companies out there. They’re difficult to work with, they’re slow to respond, and they don’t use the best vendors, which can lead to property damage and further problems and expenses for you.
There’s also the matter of cost. When you buy a home warranty, it’s with the intention of saving money on maintenance and repairs. But often, the fees and the deductibles are not completely transparent, and you end up spending more than you planned. You might also find that not everything is covered, leaving you responsible for bills you anticipated your warranty would cover.
We often talk to landlords who want to know where they should turn for the best rental warranty. We recommend that they spend a lot of time screening the company and the policy. When you’re looking for a home warranty that covers your own personal residence, you don’t have to be as vigilant. But when you’re renting out a home, time is of the essence when it comes to responding to repairs, especially when they’re habitability issues.
We like home warranties that are offered through a reliable, responsive provider. You pay a small fee for the warranty and then the repair work on many of your systems and appliances will be covered. It’s a win for you and it’s a win for your residents, who expect to have all the systems, functions, and appliances in your home working.
While home warranties can be a great idea for maintaining your Santa Rosa rental property, you don’t want to rely exclusively on a home warranty. Make sure that the warranty, if you buy one, complements an existing preventative maintenance program. You want to inspect your property carefully, especially before tenants move in and after they move out.
As you shop around for home warranties to cover your rental home in Santa Rosa, here’s what you should be looking for.
What You Want in a Home Warranty for Santa Rosa Rental Properties
There are several advantages that a good home warranty policy can provide, and you want to find a policy that leverages all the value you can find.
Think of your warranty as an extra insurance policy. Your landlord policy will only cover potential disasters, such as fires and floods, or storm damage. They don’t cover the general appliance breakdowns and air conditioning malfunctions that are likely to occur with a property. When you invest in a warranty, you have the extra coverage to pay for those systems that would not be an insurance issue.
Here’s what you should be looking for in a home warranty for your rental properties:
- Savings. You need to do a cost/benefit analysis and be sure you’re coming out ahead. You should be saving money on major repairs that would otherwise cost you thousands of dollars. As the rental property owner, you’re responsible for most of the systems and functions of the home. It’s your job to keep them working properly and safely. Maintaining a habitable home is a legal requirement and if you don’t fix the things that break, you’re going to run into some trouble both from your tenants and by allowing the condition of your property to deteriorate.
- Protection against inflation. Look for a home warranty that has a consistent pricing plan. You know that the cost of labor and supplies has gone up. Make sure you’re not paying more within the term of your policy being in force. You need a warranty that will protect you against those rising and unpredictable costs by ensuring covered repairs are made without too much guesswork or budgeting. You’ll need to pay for the service call and you’ll need to meet your deductible. That’s often a lot easier and more cost-effective than collecting bids and quotes.
- Find a user-friendly policy that doesn’t require a lot of legwork from you. The warranty company should be responsible for contacting and contracting with vendors. You’ll want them to do all of the screening to ensure the workers are licensed and insured when necessary. You don’t want to go through the process of establishing relationships with vendors and contractors when you need work done.
Check with your CPA and make sure the home warranty you buy for your rental property is tax-deductible. You can use your annual contract fee and any service fees as deductible items to reduce your tax liability. Generally speaking, this is the type of professional service cost that is often a tax write-off for landlords.
Home warranties are going to help by covering the repairs that your home needs, whether it’s a water heater or an electrical system. This saves you money on repair costs and it helps you to simplify your budgeting when you’re looking at variable costs throughout a tenancy or even the life of your investment property.
What to Avoid When Shopping for Santa Rosa Rental Property Warranties
We know a lot of people, particularly rental property owners, have had major struggles with warranty companies. They end up wishing they had never purchased the policy at all. A lot of property managers hate working with warranty companies. This is why a reliable home warranty company with a reputation for providing fast repairs, good vendors, and outstanding customer service is so essential.
Choose wisely.
You don’t want to be stuck with a company that isn’t great at service or customer support.
Know what not to look for when you’re choosing a warranty. Here’s how a home warranty company can be a detriment to a well-managed Santa Rosa rental home:
- Home warranty companies that are slow to respond to claims. If there’s not a sense of urgency when you call a warranty company to report a problem, you’re not working with a great company. For example, if your tenant calls to tell you that the water heater is leaking and it takes the warranty company two days just to send someone out to diagnose the problem, your tenants aren’t going to be happy. They’re going to be left with a leaking water heater, a mess, and probably a lack of hot water. That’s a habitability issue. The process is often a little longer when you’re working through a warranty, so there may be a long wait ahead, too. The vendor has to let the warranty company know what the problem is, and then they have to gain approval from the warranty company to make the repair. This will not help your tenant retention plans. It could also cause additional damage to your property.
- The warranty is limited in scope and does not cover a lot. This is not a surprise you want to encounter when you’re expecting your warranty to cover something. You pay an annual fee and you expect the warranty to take care of any repair that’s needed at your property. But, that’s not always going to happen. You may also be surprised by what is not covered in your policy. You might be even more surprised at what you have to pay in service fees that are charged just to send someone out to the home. You could end up paying for the diagnosis only to find out that the repair is not covered.
- The vendors and contractors aren’t the best in their field. Your warranty company will choose the vendors and contractors that are used, so you can’t be sure of the quality. As Santa Rosa property managers, we have great relationships with high-quality vendors and contractors. We have high expectations. The teams chosen by home warranty companies don’t always meet our standards, and they may not meet yours.
These are the red flags to shy away from when you’re choosing a warranty. As long as you’re working with a company you can trust, you should not have to worry about potential problems.
Let’s Talk about Whether you Need a Home Warranty for a Rental Property
Now that you understand the benefits and the drawbacks of different policies, are you thinking you’d be well-served by a home warranty? It’s not for everyone, and if you’re working with a great property management company that pays attention to maintenance and has great vendors in place, you may not need one.
Here’s what to ask yourself:
- How old is your home? Older properties are more likely to have systems that are likely to wear out. If you’re renting out an aging home, a warranty might be a good idea.
- Are you willing to invest in a good home warranty? When you buy a basic policy, they don’t cover a lot. Sometimes, you’ll get the cheapest home warranty that’s out there, and you end up spending more money. You’ll end up paying for all the things that aren’t covered.
- Have you read the fine print? You have to be sure you understand what you’re paying for when you buy a warranty. You have to know what it covers, but more importantly, you need to know what it excludes.
As you look for a home warranty for your rental property that will deliver the benefits without all the drawbacks, we’d be happy to help you screen warranty companies and find one that’s easy to work with. Please contact us at Prestige Real Estate & Property Management. We manage homes in Sonoma County, including Santa Rosa, Windsor, Sebastopol, Petaluma, and Rohnert Park.
