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Home Warranty - Good or Bad for the Landlord?

Home Warranty – Good or Bad for the Landlord?

A home warranty is an insurance policy on your home systems and basic appliances. After paying an annual premium, generally, if an appliance breaks down or a plumbing problem occurs, the home warranty co

mpany will perform the repairs.


A home warranty is good for the landlord if he is covered by the warranty at the time of break down. Timing is everything. Warranty companies will cover many breakdowns but will not cover negligence or intentional damages by tenants. If, in a fit of rage the tenant smashes a faucet, it will not be repaired by the warranty company. However, if the worn faucet falls off in the hands of the tenant during use, it should be a covered repair.


The cost of the home warranty varies depending upon the size of the home. The greater the square footage of the home the higher the cost of the policy. Prices range from $295 to $450 annually. Additionally, each trade sent to the house requires a deductible payment ranging from $45-60 per trade per incident. If a plumber is required to fix a garbage disposal then a $45 deductible is required. However, if an electrician is needed to fix a light switch another $45 is required for this trade.

If you are paying $300-400 per year for this service you’ll need to have at least that same amount in “approved” repair jobs to break even. The kicker comes with the expensive repairs, such as an air conditioner replacement. If you are covered when the a/c breaks down, you made a wise choice.

If you think of the warranty as insurance you will keep your peace of mind. However, if you attempt to break even or better on the insurance it may be a strain if you cannot locate enough worn items for repair.

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