Home Warranty for Rental Properties – Is It Necessary?

Have you ever thought if a Home Warranty for Rental Properties is necessary? We all that owning a rental property may be an excellent approach to producing passive income while also establishing a successful long-term financial plan. Maintaining rental properties, on the other hand, can be costly, possibly reducing the financial benefits of ownership. A property may fail at any time, leaving property owners with large repair fees.

Home Warranty for Rental Properties

Home Warranty for Rental Properties

Covering the expenditures of numerous houses might get difficult in some situations. This is where home warranties for rental property come into play.

They can assist in paying the costs of repairing broken appliances and systems, and in extreme situations, they can even cover the cost of replacement.

This article will explain what a house warranty is, letting you know whether or not it is a good idea to purchase one for a rental property.

What these warranties usually cover, the benefits and drawbacks, and recommendations for the finest home warranty providers will also be presented. Finally, we’ll provide some advice on selecting the best home warranty for your rental property.

About Home Warranty for Rental Properties

A home warranty for a rental property works the same way as a warranty for a personal residence. In the event of a breakdown, these service contracts will take care of the property’s appliances and systems, including the refrigerator, stove, HVAC, electrical, and plumbing.

The key benefit of a home warranty for a rental property is the predictability it brings to the process of allocating funds for maintenance and repairs. The yearly warranty fee can be paid in equal installments over the course of a year, protecting you from the ups and downs of repair costs that can otherwise disrupt your monthly budget.

When a tenant makes a claim under the house warranty, the only additional cost to the landlord is the deductible.

Items Covered in a Rental Property Home Warranty

The following are examples of systems and appliances that are often covered by a rental property house warranty, as outlined by the National House Service Contract Association (NHSCA):

Mechanized Structures

  • Interior Plumbing
  • Heating System
  • Electrical System
  • Water Heater
  • Ductwork

Home Appliances

  • Plumbing
  • Heating
  •  Electrical Systems
  • Water Heating
  • Stove Refrigerator Microwave
  • Garage Door Opener
  • Waste Disposal Unit

Other possible available items are;

  • Air conditioning.
  • Refrigerator
  • Washer and dryer
  • Accessories for the Swimming Pool
  • Spa Fixtures

Advantages and Disadvantages of Home Warranty for Rental Property

What are the benefits and drawbacks of purchasing a home warranty for a rental property?

The benefits of a home warranty for a rental property are:

  • Budgeting for maintenance and upgrades is simplified.
  • A positive selling point when meeting with potential renters.
  • Many home warranty providers have established relationships with reliable service providers to provide repair services.
  • Home warranty and repair costs for properties are tax-deductible.


The following challenges have to be considered when choosing home warranties for rental properties

  • Even if repairs are not made, the premiums must be paid in full.
  • In the absence of specific policy modifications, certain items may not be covered.
  • A home warranty service may impose a maximum repair cost.
  • Possibility of a denied repair claim owing to tenant abuse.

It is important to read the warranty material completely and get clarification from the company if necessary before purchasing a home warranty. Plans might vary depending on the details of your property and where you live, and not all policies provide the same level of protection.

List of Top Rental-Property Home Warranty Providers

Here is a list of the best home warranty companies for rental homes to help you make a decision.

American Home Shield (AHS)

When it comes to rental properties, American Home Shield (AHS) is widely considered to be the top home warranty provider overall. Depending on the chosen service and level of coverage, monthly premiums can be anywhere from $24.99 to $64.99.

Choice Home Warranty 

Plans from Choice Home Warranty range in price from $36.17 to $43.85 per month, and service fees are $60 to $85 per incident.

First American Home Warranty

The First American Home Warranty’s First-Class Upgrade service, which protects landlords against the costs of fixing systems and appliances that have been improperly installed or maintained, is the most cost-effective option available. The prices vary.

Liberty Home Guard 

Liberty Home Guard is a relatively new home warranty provider with an A+ rating from the BBB and monthly rates between $39.99 and $59.99 plus a one-time $60 service charge.

Tips for Choosing The Right Rental Property Home Warranty

Selecting the best home warranty for your rental homes is an important decision.

Consider the following considerations to make an educated decision:

Service Area

Make certain that the home warranty provider covers all of your rental properties. While most providers offer extensive service regions, there may be gaps in coverage, so double-check the details.

Policies and Strategies

Examine the coverage alternatives provided by the supplier. Look for policies that are appropriate for rental homes, such as ones that cover incorrectly installed appliances or home systems, as well as pre-existing issues.

Average Monthly Rate

To determine the affordability of the coverage, look at the average monthly rate. Keep in mind that in many circumstances, you may be required to pay for the complete year in advance.

Service price

This is the price you pay when you make a claim. Compare the servicing charge to your budget and the probable cost of repairs.

Craftsmanship Guarantee

To assure the quality of repair work, a craftsmanship guarantee is required. Longer guarantees offer more peace of mind.


To reduce the overall cost of the home warranty, look for available discounts, such as multiyear policy discounts.

Claims procedure

Because renters anticipate fast repairs, a quick and effective claims procedure is critical. Consider how easy it is to file claims and find out if the company provides online and phone assistance.

Technician Selection

Whether you have preferred technicians or contractors, see if the supplier enables you to select your own technician. This is especially important for property owners who have reliable service suppliers.


Home warranty for a rental property is an excellent resource for landlords and real estate investors. It makes it easy to plan for and control repair costs, which simplifies budgeting.

If you choose the right rental property home warranty provider, it reduces some issues you might have, since the major components of your rental property will be taken care of in the event of an emergency.

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