Colorado Realty and Property Management, Inc.

Denver Property Management | Property Management Denver | Property Management in Denver

Landlords Apply Here
Search Rentals
Tenants Apply Here
Pay Rent
Maintenance
Owner Login


Denver Metro Landlords: 303‑710‑8844
Colorado Springs Landlords: 719‑356‑4095
Fort Collins Landlords: 970‑444‑7063
Schedule A Showing: 720‑619‑8886
  • Home
  • Property Management Services
    • Start Here
    • Why Choose Us?
    • Pricing
    • Testimonials
    • Tenant Screening
    • Free Rental Analysis
    • Owner Checklist
    • CRPM Advantage
    • Value Comparison Calculator
  • Areas We Serve
    • Arvada Property Management
    • Aurora Property Management
    • Broomfield Property Management
    • Castle Pines Property Management
    • Castle Rock Property Management
    • Centennial Property Management
    • Colorado Springs Property Management
    • Denver Property Management
    • Fort Collins Property Management
    • Highlands Ranch Property Management
    • Loveland Property Management
    • Thornton Property Management
    • Westminster Property Management
    • and More
  • Property Owners
    • Property Owner Portal
    • Property Owner Resources
    • New Property Onboarding Forms
    • Property Owner FAQ
  • Testimonials
  • Real Estate
    • CRPM Advantage
    • Jason Cassidy – Real Estate Agent in Denver, CO
    • Denver REALTOR® Referral Program
  • Tenants
    • Search Available Rentals
    • Apply Online
    • Pet Screening
    • Resident Benefits Package
    • Tenant Login
    • Tenant Resources
    • Lease Change Form
    • Maintenance Request
    • Pay Rent Online
    • How to use a lockbox
    • Tenant FAQ
  • News
    • Property Management
    • Colorado Laws For Landlords Resources
    • Monthly Newsletter
    • Property Maintenance
    • Property Improvements
    • Rental Property Investing
  • About
    • About Us
    • Our Promises
    • Testimonials
    • Our Team
    • Our Pledge
    • Our Awards
    • NARPM Code of Ethics
  • Contact Us
    • Review Us
    • Thank You For Your Feedback

The True Cost of a Home Warranty

Cost of a Home WarrantyColorado Realty and Property Management, Inc. (CRPM) was recently involved in a contentious Home Warranty claim and we wanted to take the opportunity to discuss some of the hidden pitfalls of these service plans.

We certainly understand that for some owners, they offer an implied savings on service calls. But we are discovering that Home Warranty plans can end up costing the owners more than they anticipated, both figuratively and literally.

The most recent incident involved an emergency call placed by the tenants on a Sunday evening to report a leaking hot water heater. Our office was able to walk the tenants through the turn off process but the tank was still leaking into the basement. We notified the warranty company and initiated a claim. Our office was told that the tenants would be contacted in order to have the unit inspected on the next business day, and that the warranty company did not consider an active leak to be an emergency capable of damaging the property. And the story just gets worse from there.

The warranty company’s approved vendor did not call our tenant on Monday as they had promised, so the claim was re-assigned. When a work order is re-assigned, the clock starts over. At 6pm on Tuesday when the tenants still hadn’t been contacted, we spoke to the assigned vendor who indicated that the 24 hour warranty window did not mean that they would be on site in that timeframe but rather that they would make initial contact within 24 hours to set up an appointment at a later time and date.

When the vendor finally made it out on Wednesday and determined that the hot water heater was indeed leaking and needed replacement, he (the Vendor) requested that he be removed from the service call because he could not afford to front the cost of the new unit – he was of course still paid for the service call.

We began to see a pattern of ineffective communication and unreliable service from the Home Warranty company and their network of vendors despite our constant efforts to coordinate between all parties. Ultimately, the water heater was replaced Thursday evening, 4 1/2 days after the initial call. But even then, the installation was not without added cost; the warranty company did not cover $523 of the replacement, so coupled with the service call it was a $600 hot water heater as opposed to the advertised $60 deductible. Hopefully the Vendor used a good quality hot water heater.

Had CRPM followed our standard protocol and used one of our approved vendors, the hot water heater would have been replaced Monday morning. The standard cost for a quality hot water heater installation is approximately $895. And while based just on numbers, the warranty company seems to come ahead in the comparison, this is assuming that their vendor also used a high-quality, long-lasting new water heater as CRPM’s vendors do. But we cannot forget the monthly payments made to the warranty company, which is supposed to avoid these very costs. And we have not even begun to factor in the cost of having tenants go 4+ days without hot water.

​Our goal as the property manager is minimize turnover. This situation amounted to quite the inconvenience for the tenants but it is the greater, unquantified cost to the owner that will bear long-term consequences. How has this incident damaged the relationship with the tenants? Are they more likely to not renew their lease and move out? We have found that tenants who receive slow service or the implied feeling of being ignored are more likely to move out during the next rent cycle, and they tend to file more frivolous maintenance requests during their tenancy. This in turn can cost the owner a new lease up fee, lost rent due to potential vacancies, as well as any deferred maintenance or rent ready expenses.

It is probably clear at this point that we are not fans of home warranty programs. If you are considering one for your property, please call our office to discuss the potential pitfalls first. Make sure you have a thorough understanding of the program and that you are asking the right questions. For example: Do you know exactly what is covered by the warranty? Do you know the response time from the service provider? Is the delayed response from the warranty company compromising the integrity of the property or causing further damage? CRPM understands the allure of the home warranty plan, but we want to caution the average property owner that if $60 for a new hot water heater sounds too good to be true, it probably is.

Filed Under: Monthly Newsletter

FREE RENTAL ANALYSIS
Receive a customized report in about 5 minutes

Follow Us

Colorado RPM Facebook Colorado RPM twitter Colorado RPM property management YouTube channel Colorado RPM LinkedIn

What will your property rent for - click for FREE rental analysis

    Property Owners & Investors
    How Can We Help You?






    Loading...

    Award-Winning Colorado Property Management Company

    Recognized for our expertise and results, we proudly offer the area’s best property management.

    2022 Best Denver Property Management Company Three Best Rated Denver Colorado Property Management 2022 Expertise Best Property Management Companies in Denver 2022

    Denver Office

    1660 S Albion St #619
    Denver CO 80222
    303-710-8391
    By Appointment Only
    Colorado RPM google mybusiness reviews

    Colorado Springs Office

    13540 Northgate Estates Drive Suite 110
    Colorado Springs, CO 80921
    719-454-0577
    By Appointment Only

    coloradorpmcoloradosprings.com

    Fort Collins Office

    970-432-3110
    By Appointment Only
    Colorado RPM google mybusiness reviews

    Broomfield Office

    12303 Airport Way #160
    Broomfield CO 80021
    303-803-1117
    By Appointment Only
    Colorado RPM google mybusiness reviews

    Colorado Springs South Office

    719-312-7752
    By Appointment Only
    Colorado RPM google mybusiness reviews

    Arvada Office

    720-679-1162
    By Appointment Only
    Colorado RPM google mybusiness reviews

    Management Services: By Appointment Only

    Property Management
    Free Rental Estimate

    It’s important to make an appointment.

    Our staff is often in the field. We want to give you the personal attention you deserve. We’re here to help and it’s important to us that we’re available to meet with you. Please make an appointment in advance.

    Colorado RPM Facebook  Colorado RPM twitter  Colorado RPM property management YouTube channel  Colorado RPM LinkedIn

    Denver Metro  Boulder housing association   Boulder Real Estate    CLLC
    Colorado Realty and Property Management, Inc. BBB Business Review  NARPM  Broomfield Chamber of commerce  CIV  Realtor logo  echo logo
    Denver · Arvada · Aurora · Berthoud · Boulder · Brighton · Broomfield · Castle Pines · Castle Rock· Centennial · Colorado Springs · Commerce City · Englewood · Erie · Firestone · Frederick · Fort Collins · Golden · Greeley · Greenwood Village · Gunbarrel · Highlands Ranch · Lafayette · Lakewood · Littleton · Louisville · Longmont · Loveland · Niwot · Northglenn · Parker · Sheridan · Superior · Thornton · Westminster · Wheat Ridge · Windsor

    Copyright 2021 Colorado Realty and Property Management, Inc. · Lyle Haas, Managing Broker · Privacy Policy· ER.100003984 · EC.100006731