08.26.2001 :: Real Estate News
Warranties on Rentals?
by Dennis Polyniak

In the past few months I have noticed an increase in the number of warranty plans being put on rental properties. This made me wonder if landlords were catching on to a good thing or if more rental properties were being sold. As it turns out it was some of each but the with the sales of rental properties to new investor owners getting the edge.

In talking to property managers and realtors in Santa Cruz County I found out that many home owners are refinancing their homes and using the equity to buy additional properties that can pay for themselves with the cash flow from rental income. There remains a shortage of certain types of properties for rent even though vacancies exist in the area. Good clean single family homes are still at a premium and there are many families that need this type of housing. The new property owners are using home warranties to do two very important things. First, they want to insure the tenants are protected from interruptions in their use of the property, such as a lack of hot water, or a plumbing stoppage, both of which are covered by the home warranty. The other reason is they don't want those late night calls which forces them to deal with the problem or malfunction. They know that the warranty company has contractors on call twenty-four-seven and they can quickly solve the problem.

Now is a great time to purchase income property, there are lots of homes for sale, interest rates are down, and a real estate investment is much better than the stock market.

An important part of owning rental properties is to consider the use of a professional property manager. This takes the emotional factors out of the rental process and keeps it strictly business.

Dennis Polyniak sells home warranties for Old Republic Home Protection. You can e-mail Dennis at dennisp@orhp.com with any topics you would like to see discussed or call him at 1.800.445.6999 x178.