Home warranties can sound like a smart way to protect a rental property from unexpected repair bills. Pay an annual premium, make a service request when something breaks, and let the warranty company handle the expense.
Unfortunately, the reality isn't always that simple.
At Rentals America, we generally discourage rental property owners from purchasing home warranties. Based on our experience managing rental homes, repair delays, coverage exclusions, and restrictions on contractors can outweigh the potential savings.
For Tucson rental property owners, timely maintenance is particularly important during the summer, when a failed air conditioner can quickly become an urgent issue.
We believe most owners are better served by setting aside the money they would otherwise spend on warranty premiums and service call fees (copays) and using those funds for repairs as needed.
How Do Home Warranties Work?
A home warranty is a service contract that provides limited coverage for certain appliances and household systems.
Depending on the policy, coverage may include air conditioning, heating, water heaters, plumbing, electrical systems, and major appliances.
Owners typically pay an annual premium and an additional service fee each time they request a repair.
If the problem qualifies for coverage, the warranty company generally assigns a contractor to diagnose and repair the issue.
While this arrangement can make maintenance expenses seem more predictable, there are important limitations. The warranty provider determines which repairs qualify, which contractors can perform the work, and how much it will pay.
A covered appliance or system doesn't necessarily mean a fully covered repair.
Five Reasons We Generally Discourage Home Warranties
1. Repair Delays Can Create Bigger Problems
Perhaps the most significant disadvantage of home warranties is the lack of control over repair timelines.
Warranty companies typically require owners to submit a claim and use an assigned contractor. Depending on the repair, additional approval may be needed before the contractor can proceed.
We've experienced another complication that many owners don't anticipate.
In some cases, warranty companies purchase replacement parts themselves and ship them directly to the assigned contractor rather than allowing the contractor to obtain the parts locally.
Although this approach may save the warranty company money, we've seen relatively simple repairs take 10–14 days because of the additional wait.
For an owner-occupied home, that may be an inconvenience. For a rental property, it can create much more serious consequences.
Landlords are responsible for maintaining their properties and addressing essential maintenance needs. A warranty company's scheduling or parts-ordering process doesn't eliminate those obligations.
When a repair involves air conditioning, hot water, or another essential service, delays can also create additional financial exposure.
Depending on the circumstances and applicable law, owners may face rent reductions, other resident remedies, or costs associated with restoring essential services.
A repair that saves a few hundred dollars through a warranty can ultimately cost more if the resident is left without an essential service for an extended period.
2. Unexpected Charges Can Wipe Out the Savings
Home warranties have become less useful than many owners expect because coverage often excludes expenses associated with otherwise covered repairs.
Consider a failed water heater.
A warranty company may agree to replace the water heater but charge the owner separately for removing and disposing of the old unit. We've encountered situations where these additional charges amount to hundreds of dollars.
The same issue can arise with air conditioning.
A warranty may cover a failed HVAC component while excluding some or all of the refrigerant required to complete the repair. Depending on the equipment, that expense can be substantial.
Owners may also encounter coverage limits, installation-related charges, or exclusions for certain repairs.
When you add these expenses to the annual premium and service fees, the financial benefit of the warranty can shrink considerably—or disappear entirely.
3. Repeated Repairs Aren't Always the Best Solution
Warranty companies have a financial incentive to repair equipment rather than replace it whenever possible.
While repairing a system is often appropriate, it isn't always the best long-term decision.
An aging appliance or air conditioner may experience repeated failures. Repairing one component can restore operation temporarily, only for another problem to occur shortly afterward.
Each additional failure can mean another appointment, another service fee, and more inconvenience for the resident.
Rental property owners need to consider the total cost of maintaining aging equipment, not simply the cost of the next repair.
Sometimes replacing a failing system is the more economical decision over the long term.
4. You Have Limited Control Over Contractors
Most home warranty companies use their own network of approved service providers.
This limits an owner's ability to choose a contractor based on availability, reliability, quality of workmanship, or familiarity with the property.
At Rentals America, we regularly coordinate maintenance with established vendors who understand the expectations of servicing occupied rental homes.
Having the flexibility to select a qualified contractor—and change contractors when necessary—can make a significant difference in how quickly an issue is resolved.
With a home warranty, the owner's options are often restricted by the warranty provider's procedures.
5. Maintenance Delays Can Hurt Resident Satisfaction
One expense that rarely appears in a home warranty comparison is the potential cost of an unhappy resident.
Residents expect maintenance problems to be addressed promptly, especially when they affect everyday essentials.
Repeated service visits, missed appointments, or extended delays can undermine confidence in how the property is managed.
If those experiences contribute to a resident deciding not to renew, the owner may face vacancy, advertising, leasing expenses, and lost rental income.
Saving money on an individual repair means little if the process creates larger expenses elsewhere.
Why Repair Timelines Matter for Tucson Rental Properties
Southern Arizona's summer heat makes reliable air conditioning essential to maintaining comfortable and habitable rental homes.
In Tucson, an air conditioning breakdown during hot weather may require prompt action that doesn't fit neatly within a warranty company's normal claim process.
Arizona law requires landlords to maintain supplied air-conditioning systems in good working order and provide reasonable cooling where installed and offered, subject to statutory qualifications. Residents may have remedies when a landlord deliberately or negligently fails to supply essential services, depending on the circumstances and required notice.
At Rentals America, we make an effort to coordinate repairs through an owner's existing home warranty whenever practical.
However, if an urgent issue cannot be resolved through the warranty provider within the timeframe required by applicable law, we may need to arrange another qualified contractor.
That could mean paying for work that might otherwise have qualified for warranty coverage.
Our responsibility is to help owners maintain their properties, address residents' needs, and comply with applicable requirements—not simply wait for a warranty company to complete its process.
This is why control over repair scheduling and contractor selection is especially valuable for rental property owners.
Are There Situations Where a Home Warranty Makes Sense?
Although we generally recommend against purchasing home warranties, they can occasionally provide value.
For example, a warranty included with a property purchase may offer some short-term protection at little additional cost.
A policy that pays for a major equipment replacement with minimal out-of-pocket expense can also produce meaningful savings.
For owners concerned about unexpected repair bills, the promise of more predictable expenses may be appealing.
However, a warranty does not eliminate the need for maintenance reserves. Owners can still face substantial uncovered expenses, and urgent repairs may need to be completed outside the warranty program.
The potential benefit should be evaluated against the full cost of the policy and the limitations it places on maintenance decisions.
A Better Approach: Save the Premiums and Copays for Repairs
Instead of purchasing a home warranty, we recommend building a dedicated maintenance reserve.
The simplest approach is to set aside the money you would otherwise spend on annual warranty premiums and service call fees.
Consider this hypothetical example:
Expense | Annual Cost |
Home warranty premium | $700 |
Service call fees (copays) | $300 |
Total | $1,000 |
An owner who sets aside that same $1,000 annually would contribute $5,000 toward future maintenance over five years, before accounting for repairs paid from the reserve or any interest earned.
That doesn't mean every owner will have $5,000 remaining after five years. Repairs will still occur, and major replacements may require additional funds.
The advantage is that the money remains under the owner's control until it's needed.
Paying for maintenance directly also allows owners to:
Choose their contractors based on responsiveness, quality, and price.
Make repair-or-replace decisions based on the property’s long-term needs.
Avoid warranty approval delays when repairs need to move quickly.
Understand the full repair cost without navigating coverage exclusions.
Respond more effectively to urgent issues that affect residents.
Owners should maintain sufficient reserves beyond the amount saved on warranty expenses, particularly when major systems are aging.
For additional guidance, see our Rental Property Maintenance Guide. [Website team: link to Tucson guide.]
Our Recommendation: Maintain Control Over Your Property’s Repairs
Home warranties can occasionally produce savings, but our experience has shown that they frequently come with tradeoffs that aren't obvious when purchasing a policy.
Repair delays, excluded expenses, repeated service calls, and limited contractor selection can all reduce their value.
For most rental property owners, we recommend skipping the home warranty, saving the money that would otherwise go toward premiums and copays, and working with reliable contractors who can complete repairs promptly.
The best maintenance strategy isn't necessarily the one that produces the lowest invoice for a single repair. It's the one that protects the property, serves residents well, and manages costs effectively over time.
Frequently Asked Questions
Are home warranties worth it for rental properties?
Generally, we don't recommend them. While a home warranty can occasionally save money on an expensive repair, premiums, service fees, coverage exclusions, and repair delays often reduce the financial benefit.
Do home warranties cover air conditioning repairs?
Many home warranties include HVAC coverage, but the extent of coverage varies. Refrigerant, installation modifications, and certain additional expenses may be excluded or subject to limits.
Can a home warranty company delay a repair while waiting for parts?
Yes. We've encountered situations where warranty companies order parts themselves and ship them to contractors, resulting in repairs taking 10–14 days. This can be particularly problematic when an essential system is not functioning.
What if a home warranty company can’t repair an air conditioner quickly enough?
The landlord remains responsible for applicable maintenance obligations. An urgent situation may require another contractor even if the repair will not be covered by the warranty. Resident remedies depend on the facts and applicable law.
Should landlords save for repairs instead of buying a home warranty?
For owners who can maintain adequate reserves, we generally recommend setting aside the money that would otherwise be spent on premiums and service call fees. This provides greater flexibility over repair costs, contractor selection, and scheduling.
