Property owners may have the option to get a home warranty when purchasing their income property. Home warranties allow the homeowner to have certain systems or appliances repaired or replaced when they break for a discounted price.

Home warranties may make sense for traditional homeowners, but do they make sense for rental properties? With the amount you pay in premiums for a home warranty, it may not be the right choice for you as a landlord in DC.

When you have a rental property, the pros of having a property manager may outweigh the benefits of purchasing a home warranty—here’s why.

A Home Warranty May Cost More Than It’s Worth for Your Rental

Home warranties typically charge a monthly premium in addition to a service fee. For example, you could pay up to $60 a month in premiums and over $100 for each service fee for systems covered under the warranty.

Compare this to the cost of property managers, which typically charge a percentage of the monthly rent or a flat fee to manage the property. Although a property management company may or may not include maintenance as part of the cost, the fee structure can offer a better return on your investment than a home warranty.

For example, the home warranty won’t cover everything. It may cover the cost of a broken septic system but won’t cover damage caused by the problem. In addition, the warranty may not cover the problem if it was caused by a tenant’s negligence.

Property managers often take a preventative approach to maintenance to keep systems from failing in the first place. For the cost of a home warranty, you may get much less than you think as a landlord.

Poor Customer Service Can Lead to Tenant Complaints

Homeowners may be fine waiting for a national home warranty company to find a local contractor who can fix their plumbing in a pinch. However, the process can take longer than expected, even a few days.

Tenants, on the other hand, are rarely satisfied with this service. Renters expect that any problems with the home will be dealt with as quickly as possible by the landlord or property manager. Waiting for service from a home warranty company can lead to unhappy tenants and reflect poorly on your property.

In addition, property managers who have to act as the middleman between tenants and the home warranty company often have to deal with complaints from tenants. They may also have to pay contractors up front and then wait to get reimbursed by the home warranty company.

The entire process can be a hassle, and the delays in service can cost more damage to your property than you initially started with. While a home warranty may save you some money in such situations, it can also hurt your reputation with your renters, who will hold you accountable rather than the home warranty company.

Why to Consider a Property Manager Over a Home Warranty

A property manager is often a better investment for landlords than a home warranty. Local property managers tend to have a network of companies in the area they can contact on short notice to fix problems.

Giving a property manager more control over the repair process can shorten response times, reduce additional damage to the unit, and make tenants happier. A home warranty isn’t always worth the extra money and hassle for landlords in DC.

For an affordable fee, property managers provide more than a quick response and fast service—they give both landlords and tenants peace of mind.

Do You Have a Rental Property in DC?

If you have a rental property in the DC area, consider hiring FAS Management as your local property management company. Contact us today at (202) 337-5080.