A common question that I get with investors is, “Should I buy a Home Warranty for Rentals?”. There are many pros and cons to buying a home warranty regardless of if it is a rental or not. In order to really understand what goes into this you must first understand what your “warranty” covers and what your caps are and understand what your “warranty” really covers.
Some consumers believe that a home warranty is like other warranties, when in reality it is just a home services contract that pays for necessary home repairs due to common maintenance issues or for replacement if they cannot be repaired. It is important to note that a home warranty does NOT cover every repair or issue you might have in the home. Typical policies cover home appliances, heating, cooling, plumbing, and electrical systems; however, there may be additional coverage you can purchase for an additional cost.
Consumers always should read their home warranty contract and make sure they understand what it covers and please read the entire document. Also there are caps in every coverage and it important to know what that is. If you reach that cap you may be responsible for the additional cost over that amount. Your contract may specify a cap on replacing your Air Conditioning at $1000, which would make you responsible for the remaining amount.
As stated before, there are a lot of questions that consumers may have and I am no expert on home warranties. Just remember, read your contract, ask questions, do the math to see if it is worth it, and always do your research.
For more information on this topic go visit my friends at Cozy and see their blog.
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