South Bend offers an accessible way to get into real estate investment. Home values are significantly lower than the national average. Demand for rentals is strong, due in part to the large student population.
Success as a landlord requires handling a range of issues for your tenants. A home warranty can help you address maintenance and repairs at a lower cost. However, home maintenance insurance has many exclusions and may not be worth the money.
Learn more about home protection plans and whether a home warranty would be the best choice.
What Is a Home Warranty?
A home warranty is actually a service contract. It covers the repair or replacement of some of the major systems and appliances in your rental property.
Policies vary in their terms and coverage. Most home warranty providers offer three types of plans:
- System plans, which cover major systems like plumbing, electrical, and HVAC
- Appliance plans, which cover major appliances like the dishwasher, oven, and washing machine
- Combination plans, which cover major systems and appliances
If you want coverage for items like in-ground sprinklers or the swimming pool, you'll likely need additional coverage. Be sure to read the fine print of any plans you're considering so you know exactly what's included.
Benefits of a Home Warranty
A home warranty can be beneficial to you as a landlord. Maintenance and repairs are one of your largest expenses. If you own older properties, home protection plans can save you money.
Appliance repair coverage gives your tenants peace of mind. They know that if something breaks, professionals will address the issue.
Prompt attention to repair requests improves the tenant experience. Tenants are more likely to renew their lease, reducing turnover.
Issues to Consider with Home Protection Plans
A home warranty isn't necessarily the best choice for your investment properties. Warranties usually have a 30-day waiting period before coverage will start.
You should read the fine print carefully because policies often have many exclusions. For example, if you have a plumbing problem that is only accessible through the wall, home maintenance insurance may not pay to fully repair the wall afterward. You could be responsible for the cost of making the repaired area match the rest of the wall.
Coverage limits often apply as well. The home warranty company will only pay so much of the cost to repair or replace an item.
Most companies have a list of contractors you can use for covered services. You may not be able to use the contractor you would prefer.
Trying to schedule a repair from a limited pool of contractors often results in delays. This is a problem for you and your tenants.
Is a Rental Home Warranty Right for You?
A home warranty helps cover the cost to repair or replace major appliances or systems in your rental property. However, plans have limits and exclusions that can lower the cost-benefit score.
You don't need a home warranty to gain peace of mind on repairs and maintenance. PMI Michiana is a full-service real estate asset management company. We provide 24/7 maintenance support and after-hours emergency response.
You can trust our network of contractors to handle your repair and maintenance needs. Schedule a consultation with PMI Michiana today to learn how we can improve the rental experience for you and your tenants.
