Wednesday, April 14, 2010

Should I buy an extended warranty or service warranty for items in my investment property?

Should you purchase an extended warranty on appliances or items that are
located in your investment property. This is a question I receive from
people who have investment properties.

You may feel more conformable with warranties in place, especially when it's
a tenant using the items and not you. Tenants tend to be harder on
appliances and tend to not maintain systems the way you the owner would, and
appliances may break down more often or quicker than they normally would.
Thus extended warranties may pay off in the long run.

Many of my clients with rental properties purchase extended warranties on
their appliances and get furnace and air conditioner regular maintenance
packages to keep them in good running order.

For my personal items that I use and enjoy, our appliances, furnace and air
conditioners, computers, electronics and my vehicles, I never purchase an
extended warranty. My opinion is to never purchase an extended warranty on
anything, anytime ever. It's really up to you and your comfort level.

A friend of mine told me back in the early 80's that the amount of "money
that you save" by not spending any money on extended warranties over a 10,
20 or 30 year period is far greater than the amount you may end up spending
on the occasional repair of an item once it's past it's warranty period. If
an item does not break during it's warranty period then it's more likely
'not to break' once it's past the period. If it does break or fail after
the warranty has expired the cost of repair is usually far less than you
would have paid for the extended warranty, OR you will replace the item with
a new one since the cost has come down so much OR that it may be time to
purchase a new one and upgrade or update to current technology. This is
especially true with electronics. Of course, this is only my personal
opinion, but many will argue the other way.

We also believe that it's those little costs throughout the week and the
month that add up to huge savings every year for us.

I wish you all the best!

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