Is a Home Warranty on My Sacramento Rental Property Worth It?

We understand the inclination to purchase a home warranty for your Sacramento rental property, however it’s not a great idea. These warranties are marketed as a way to save you money, but they can actually be incredibly costly and not worth your investment. 

If you’re considering a home warranty for the property you occupy yourself, it may be to your financial advantage. But when it comes to rental homes – they aren’t good for you and they aren’t good for your residents.

Preventative maintenance programs and routine inspections are far more effective when it comes to saving money and protecting your investment. 

Communication often Stalls with Home Warranties 

The concept of a home warranty is that when something in the property breaks, the warranty company will replace or repair it at no cost to the homeowner.

However, that’s often not what happens. 

In our experience, we’ve found that there’s often a lack of communication and transparency when it comes to warranty companies. There are some good ones out there, but we don’t think the warranty company is usually interested in serving the best interests of the policy holder or the people living in the home. They’re in business to make money, and in order to make money they have to cut corners and deny claims. 

Two or three days may pass before a vendor is even sent out to assess the problem at your property. That may be tolerable if you’re the one living in the home and you’re in no hurry to have an issue fixed. But residents expect to have their maintenance issues addressed immediately. 
 

Home Warranty Companies Are Slow

Keeping your Sacramento 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 residents and may put your property at risk. They do not work quickly, and there is rarely a sense of urgency. 

Suppose the furnace breaks during the coldest week of the winter. As your Sacramento property managers, we’d have our vendors out there right away to fix the problem and restore heat to the property. The warranty company, however, may spend a week just diagnosing the problem and then another week waiting for parts and then another week fixing the issue. 

That’s terrible customer service and unfortunately, it’s not uncommon. 

Meanwhile, your resident is upset and likely not going to renew their lease agreement. 

Home Warranties Don’t Deliver High Work Quality

We have also run into some issues with the vendors that home warranty companies use. They are not always the best, and that can result in faulty or incomplete work. Using low cost 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 Sacramento property management company will have access to great vendors and contractors who do professional work quickly and for cost-effective rates. 

Costs versus Service with Home Warranty Companies

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.