Whether or not to purchase a home warranty for your investment property is a question that many property owners struggle to answer. It can be hard to measure the cost against the security of having your systems and appliances covered. Today, we’re discussing the benefits of a home warranty.
How Does a Home Warranty Work?
A home warranty will cover the repair or replacement of any covered objects and systems in your property. The benefit is not being caught with surprise costs. You’ll know what your policy covers as far as electrical and plumbing systems, and also the appliances in your home.
Measuring Costs of Warranties versus Service
If your air conditioning goes out, the cost to replace that would be between $3,000 and $5,000. That’s a lot of out-of-pocket money for you to absorb. Having that home warranty in place can give you an easier feeling. You’ll spend less on the warranty than you would on the cost of replacing your air conditioning system through a vendor.
Home Warranties and Appliances
You also want to consider the appliances in your home. Think about when they were last updated. Keep track of the costs associated with those appliances. When you purchase a home, make sure that you’re thinking about how a warranty may cover your appliances. In the long run, a warranty can save you tons of money on unexpected costs.
When you purchase an investment property, the seller will typically pay for the warranty. So, it’s not a cost you have to bear during that first year of ownership. It saves your rental income during that time, and you can decide whether you want to continue keeping the warranty in place.