Home Warranty vs. Putting Money Aside

As summer approaches in Las Vegas, HVAC becomes a primary concern to all landlords. Adding central air conditioning to an existing forced-air heating system or installing a new HVAC system in a 2,000-square-foot house averages $3,500 -$4,000, and can be done by two technicians in 2-3 days, with little or no change to the existing ducting.  Keep in mind that with the new EPA laws governing renovation and work completed on a house built prior to 1978 there is a lot more cost involved in making repairs.  This cost will be most likely passed on by the contractor to the homeowner.  The cash reserve required for your rental property will vary with the style and size of the home.  A good rule of thumb is to keep at least 4x the monthly rent in a cash reserve. 


Depending on the home warranty, standard plans run about $300-$400 per year and typically cover the electrical operation of the HVAC, including the evaporative cooler.  Premium plans most often include code upgrades and mismatched systems and run between $500-$600 per year.

As you can see, it doesn't take much to have a home warranty make sense.  However, make the decision based on the age of the property and if you've already invested in rehabbing the existing systems.  Energy prices are already soaring; there's no need to throw more dollars out the window.