Should I Get a Home Warranty for My Nashville Rental Property?
If you’re new to investing in Nashville rental property, you may be considering a home warranty. We strongly recommend against purchasing a warranty, and there are several reasons for this, which we’ll discuss in detail.
Unfortunately, we’ve never had a scenario where the protections and savings offered by the warranty company actually materialized. It ends up costing more time and money, and leaves your Nashville property managers and your tenants frustrated.
With preventative maintenance programs and routine inspections, you can do much better for your investment property than a home warranty. We advise against them.
Home Warranties and Communication
The idea behind a home warranty is that when something in the property breaks, the warranty company will replace or repair it – at no (or little) cost to you.
That’s not often what happens. Bad home warranty experiences start with bad communication. We have worked with warranty companies on behalf of our clients in the past and it’s rarely, if ever, worth it. There’s a major lack of transparency between the warranty company and everyone involved; the property owner, the property manager, the tenants, and the vendors. Two or three days usually pass before a vendor is even sent out to assess the problem. Tenants are sometimes required to contact the vendor themselves, and details can get lost and misrepresented.
Home Warranty Companies Rarely Act with Urgency
Keeping your Nashville rental property safe and habitable is your responsibility as a landlord. Waiting for a home warranty company to complete work in a timely manner will damage your relationship with your tenants and may put your property at risk. They rarely work quickly, and there is very little sense of urgency.
Here’s an example. During one January, it was 27 degrees in a rental home because the heat was not working. The family renting the property had an infant living with them, so getting the heat fixed was a huge priority. We would have sent someone out immediately and had our preferred vendors take care of the problem right away. The home warranty company, however, took over a week to fix the problem. That’s terrible customer service, and unfortunately, it’s not uncommon.
Home Warranties and Quality of Work
We have also run into some issues with the vendors that home warranty companies use. They are usually not the best, and that can result in faulty or incomplete work. Using cut-rate vendors is a great way for home warranty companies to save money, but it’s a terrible way to protect the condition of your investment.
Your Nashville property management company will have access to great vendors and contractors who do professional work quickly and at cost-effective rates.
Costs versus Service with Home Warranty Companies
When you consider what you’re paying and measure it against what you’re promised, a home warranty may make sense. But home warranty companies can’t make money if they cover every claim. You might pay a premium of $600 and maybe there’s a service call charge of $60 per occurrence. The warranty company will do everything they can to deny your claim.
If you read the fine print of your home warranty, you’ll realize that not everything you expect to be covered will actually be covered. There’s very little value to be found in a home warranty, even if you buy an older home.
Ultimately, we recommend that you save your money and work with qualified Nashville property managers who can protect and maintain your investment property more efficiently and cost-effectively. If you’d like to hear more, please contact us at Omni Property Management.