Whether you own one rental property or have the beginnings of your own property empire, you’ll know just how expensive the process can be. Keeping a rental property in excellent order involves a whole host of costs, from professional cleaners at the end of a tenancy to ongoing repairs to the building itself.
But while those costs can be easily accounted for, what happens when an essential appliance such as an air conditioning unit or refrigerator gives up the ghost? That’s where home warranties for landlords can help.
What are home warranties for landlords?
A home warranty is a service contract, usually sold on an annual basis, that covers the cost of the repair or replacement of major home appliances and systems that breakdown due to normal wear and tear.
Some people confuse a home warranty with homeowner’s insurance, but they provide completely separate cover. A homeowner’s insurance policy does not cover wear and tear. Instead, it covers you for damage caused by accidents, extreme weather and unexpected events. For example, if your dryer accidentally catches fire and causes damage to your home, the repair or replacement of the dryer would be covered by homeowner’s insurance.
However, it’s far more likely that your dryer will stop working due to a fault caused by normal wear and tear, such as a belt breaking. In that instance, it is the home warranty that will cover the cost of the replacement or repair.
What should you consider when buying a home warranty for a rental property?
When buying a home warranty for a rental property, you must consider the age of the property and its accompanying appliances and systems. If it is an older property with older appliances and systems, the purchase of a home warranty is an obvious choice. If the home has been newly built and the appliances and systems are brand new, they’ll likely be covered by the manufacturer’s warranty, so a home warranty is an expense you could probably do without.
You should take the time to read the terms of the warranty carefully and make sure you understand exactly what is and isn’t covered. It’s worth thinking about whether you or the tenant will be responsible for liaising with the repair team and how the service call fee must be paid i.e. paid by the landlord in advance or collected from the tenant on their arrival at the property. The home warranty provider may also be happy to work directly with your property management company if you have one, so that’s worth considering too.
What are the benefits of home warranties for landlords?
Home warranties provide numerous benefits for landlords, helping to control their costs and make their properties easier to manage. The benefits include:
- More control over your costs - Like any business, it pays to know exactly how much money is coming in and going out at any time. A home warranty will limit the expense if an appliance or home system does breakdown to the cost of the yearly premium and the service call fee, which typically ranges from £60-$100. So, rather than having to find the money to pay for a new $1,000 refrigerator or $2,000 air conditioning system, that’ll be the only cost you have to budget for.
- A home warranty can be tax-deductible - The cost of a home warranty on a rental property is considered an operating expense, which may make it tax-deductible and reduce the tax bill you have to pay at the end of the year.
- Arranging the repair will be taken care of for you - As a landlord, you have plenty to do as it is, without having to spend time traveling to and from the property and scheduling qualified plumbers, electricians and repair teams. With a home warranty, that will be taken care of for you. That’s particularly beneficial if you own multiple rental properties.
Finding home warranties for landlords
At Go Assist, our home warranties for landlords save you time and money when there’s an appliance breakdown in your rental property to give you peace of mind. Take a look at our extensive cover and get in touch with our team.