The Benefits and drawbacks of Residential Property Administration Guarantee for Landlords thumbnail

The Benefits and drawbacks of Residential Property Administration Guarantee for Landlords

Published Jan 02, 23
8 min read

What exactly is an insurance policy for homes?

A home warranty is a type of service agreement that will cover the cost of fixing or replacing your home's system and appliances if they fail because of normal wear and tear. Home warranties are not a substitute for home insurance, which protects your home from damage caused by theft or natural disasters. They are designed to safeguard the home's appliances and systems. They are available for all kinds of homes and are able to minimize the costs of replacements and repairs which makes them ideal for both current and new landlords. Service call fees are an amount which is due to the home warranty provider every time a claim is put into. The majority of providers offer coverage for older homes, however certain ones do not provide coverage for home appliances with preexisting conditions.

What are the advantages of using a home warranty for rental properties?

1. Protection against high repair costs

A home warranty can be used to shield rental properties from high repair cost. It gives quick service, convenience and has no charges for service. This can reduce the amount of time and expense spent on repair jobs and also provides financial protection from unexpected repairs and replacements. Regular maintenance coverage helps to increase client and tenant retention. Tenants can request service without requiring approval from the landlord. The covered appliances and systems are also fixed swiftly, which lowers the chance of negative reviews. All of this can help landlords save money while charging higher rents, putting more money in their pockets.

2. Coverage for common household appliances

What are the appliances covered under the home warranty of rentals and what are they covered for? Refrigerators, dishwashers, clothes dryers and washers for clothes; garbage compactors; ranges/ cooktopsor ovens; microwaves with built-in ovens and built-in food centres; HVAC systems, heating; water heaters; electrical systems garbage disposals; central vacuums, smoke detectors smoke alarms, plumbing systems. Doorbells and ceiling fans, exhaust fans, sump pumps, septic tanks, spas and garage door openers.

3. Peace of mind knowing repairs will be made

Making repairs through the home warranty offered to rental properties can provide landlords with many advantages. By covering repairs, maintenance appointments, and even replacements, landlords save themselves from having pay out money when something goes wrong. Furthermore, a home warranty plan makes the home repair process for everyone involved . sending a claim to the warranty company, who will then send a person to their rental home to resolve the problem. In addition, since most repairs and replacements can be easily covered and resolved, property management companies can anticipate a reduction in costs for contractors hired by third parties and insurance costs. Having a home warranty for rental properties also helps to improve tenant and client retention by addressing the number one reason tenants leave: maintenance issues. Tenants can request service from their landlords and not need to be approved. This allows them to repair systems and appliances quickly. This also decreases the likelihood of tenants complaining about the service. Overall homeowners' warranties provide landlords with an affordable and effective solution for repairs to rental properties.

4. Saves time and hassle of finding a contractor

A home warranty is an efficient way to find a contractor. Instead of having to go out to find an experienced contractor with a good reputation on very short notice, the landlord simply needs to submit a claim to their home warranty provider , and they will send an individual to the rental property to take care of the issue as soon as they can. This is much simpler than having to call multiple contractors to locate the most suitable contractor.

Property managers on the other hand are able to save time and hassle by sending a trusted vendor they have already worked with to a managed home. They are familiar with the costs, workmanship and how the vendor has conducted themselves in the past. This eliminates the need to spend time researching and selecting the best contractor to do the job. Furthermore, trained vendors tend to be more ethical and considerate of tenants, which is important to ensure the satisfaction of tenants.

Additionally, getting service from a company that offers home warranties could take longer than anticipated in some cases, taking several days. Tenants can become dissatisfied if they are not satisfied with the speed at when repairs are finished. This causes frustration. Property managers serve as intermediaries between the tenants, the homeowner warranty company, and the property owners.

A home warranty is an excellent way to save time and eliminate the hassle of hiring contractors. Property managers can assign trusted contractors they have already worked with to managed homes, while homeowners can submit an claim to their home warranty provider and have the problem fixed in a short time.

5. Budget for repairs

Renters can save money by utilizing an insurance plan for home repairs and replacements to their appliances at home and mechanical systems. The plan for home warranties makes repairs more predictable and helps tenants be happier. It also boosts the bottom line. The home warranty plan is convenient because it provides a single source for all maintenance and repair needs. It is also a way to not swap money in service calls. In addition having a home warranty can reduce the owner's annual expenses by covering all or a large portion of the cost of repairing and replacing malfunctioning or old equipment and systems.

6. Additional protection against landlord liability

A home warranty for landlords helps protect against landlord liability by providing rapid, professional repairs to systems and appliances that fail due to age or normal wear and tear. Tenants are less likely to be able to sue landlords due to the repairs and replacements of appliances and systems are done promptly. Repairs covered by the warranty reduce the need to obtain landlord approval as well as resolve disputes. This also decreases the liability of landlords. In addition, having a homeowner's warranty in place can serve as an additional protection against financial loss since it is tax-deductible, allowing you to pay for rental costs.

7. The ability to select between various warranty providers

It can be difficult to select a home warranty provider for rental properties. You must consider costs as well as the reputation of the company, its customer service, and other features. We recommend looking at the various plans for service, extensions, coverage depth, plan cost, industry reputation, customer support infrastructure, and other features when selecting the right home warranty company. Also, think about whether you are able to choose your own contractor, and then upgrade your coverage package. Also, how easy it is to transfer your plan from one owner to another.

Based on our research, coverage of plans is the one that should be considered most important and customer service should be the second-most important factor. The reputation of the company, its availability as well as additional features should be rated equally, and price range should not be the primary factor in choosing a home warranty provider for your home's needs.

If, for instance, your rental property has a saltwater pool, pro-series appliances, or reverse osmosis system, Liberty Home Guard has a collection of additional features that might interest you. AFC Home Club provides additional assurance if you're not able to fix the problem within the 30-day workmanship guarantee. HomeServe special plans could be the best option for those who are most concerned about their rental's utilities and American Home Shield may be the most suitable option for those who'd rather choose an insurance provider for home repairs that has higher coverage caps.

We recommend getting quotes from at least three home warranty companies and reading through the terms carefully to ensure you are aware of any exclusions or limitations. By doing this, you can make an informed choice and choose the best home warranty provider for your rental property.

8. Possibility to avail discounts and incentives

A home warranty plan for rental properties can to save money in two ways. These plans offer a convenient and inexpensive method to repair major appliances that fail. This could help landlords save from having to pay for regular repairs. The second benefit is that the service and premium fees associated with the home warranty may be claimed on a tax return as operating expenses, dependent on the registration of the landlord. This can lower their income overall and reduce tax burden.

9. Online submission and monitoring of repair claims

Warranty plans for home owners can be extremely helpful for rental properties by simplifying the repair process. If a covered product breaks or malfunctions, landlords just have to make a claim to their warranty company. The warranty provider will send technicians to the rental home to resolve the issue as fast as they can, saving landlords the time and effort in searching for a trustworthy contractor on short notice. Through providing speedy service and convenience, home warranty plans help landlords ensure that their rental property is looked after quickly and efficiently.

10. Greater tenant satisfaction

Tenants will benefit from the HomePRO Warranty, such as enhanced service and greater customer satisfaction. The HomePRO Warranty reduces service calls because tenants can submit their demands directly, without waiting for approval from the landlord. This helps to improve the relationship between landlord and tenant. In addition, HomePRO Warranty eliminates the requirement for landlords to keep up with multiple vendorssince the warranty covers repairs and replacements for various appliances and systems. Tenants can be assured that they will receive timely and efficient service. The home warranty, which can raise the rental value of the home as well, is a fantastic way for landlords to make more each month.