Why Property Management Companies Don’t Advise Home Warranties For Investors
Owners occasionally tell me that they are thinking about getting a home warranty.
I tell them that’s fine if they want to self-manage their condo, but if we are going to manage the condo / town-home / villa for them, then we have our own maintenance crew. If a management company is managing, then a home warranty is redundant. Not only is it redundant, but it can really mess with the ability of the management company to keep operations streamlined. Why? Here’s what one property manager has to say about his experience – and it sums up perfectly why most property managers are not home warranty fans.
Owners bought it a year ago and failed to tell me they had coverage.
Had an HVAC call – sent my regular AC guy out. He said needed all sorts of work – advised the owners of the work needed and the cost and they said – “Oh – we have this Home Warranty policy.”
OK – call them on a Friday. Middle next week – tenant still with no AC. Says he has not been contacted by the HOW service.
Call the warranty company – they ask if service company has contacted tenant. I say no. They call the service company and advise that the service company has been there and the HOW is waiting on their diagnosis and I will get the results of that tomorrow – that would be Thursday – last week.
I call Friday after not hearing from them Thursday.
They call the service company and I am advised that the service company has NOT been to the property yet as they – the service company – was waiting on the payment of the $45 service call. Which I had told all I would pay it.
I call the service company – they had JUST gotten the service request from the home warranty company – that day – Friday – one week after I reported it.
I give them a credit card and how to contact the tenant.
Service guy goes out and reports they have submitted a diagnosis to the home warranty company.
Monday – I follow up and am told that the issue is there are Freon leaks in the coil. HOW does not cover leaks in the coil due to Freon, etc.
If I want to have them perform a leak check it is an extra fee. I pay that fee.
Service goes out – says yes there are multiple leaks – needs new coil.
Home Owners Warranty will not cover the costs. Quotes me $2,400 – but will discount it to $2,100.
I tell the owner yesterday. Waiting to hear back from owner.
Soon will be 2 weeks.
I hate Home Owner Warranty policies. Avoid them at all costs.
Some are better than others though.
And that says it all. As an Orlando property management company, we have our systems in place. Anything that messes with those tried and trusted ways of doing things, with tried and trusted vendors, is a stick in our spokes. And with less efficiency comes increased costs. More staff, more admin. You don’t like paying the 10% management fee. Well how about 12% if you have a Home Warranty? 🙂