Buy and hold investors often find themselves in the appliance market. Smart [tag-ice]landlords[/tag-ice] and investors know there are many ways to cut costs and get the best deals. One thing sure and certain is retailers’ profits are getting smaller and slimmer so they are now relying more and more on warranties.
Hence, the added pressure to buy warranties on ranges, refrigerators, dishwashers and etc. Question is- do we really need them? After all, we’re dealing with tenants, right?
Here’s my take. No, skip the warranties. We don’t need many of them, or probably any of them. Why?
Most of today’s appliances will last and do what they are supposed to do. We’re all familiar with the best most reliable brands. For instance, don’t ever buy high-end fancy appliances for rentals. (I wouldn’t buy those for your own home either. We had to remove a top –of- the- line dishwasher from our kitchen recently because it didn’t clean the dishes very well). If anything will break down, fancy appliances often will. And they’re more difficult to get parts for.
1. Basic run of the mill appliances are the best.
General Electric, Kenmore, Roper are some of the brands we buy on a regular basis. Still doubtful? Not sure what to buy? Go to a good and busy appliance store such as H.H.Gregg and ask one of the salespeople what apartment owners are buying. They will tell you because they know the merchandise that’s moving. They also know who’s buying what and why.
Parts for basic brands can be found fast and the costs for repairs won’t be astronomical. That’s when you actually do have repair problems, which will be rare.
2. Always be careful and get the right size.
The salespeople will tell you which frig to buy for a one bedroom or a two bedroom unit. That’s because one bedrooms will have smaller kitchens. You’d better get the smaller frig so it will fit. Too elementary? It’s a very common mistake. Beware.
3. Make sure your tenants know how to use appliances properly
Sometimes repairs come about because tenants simply aren’t taking good care of the appliance. Did you know you shouldn’t completely fill up a dishwasher’s soap box? We got that tip from a dishwasher repairman. Too much soap puts too much added stress on the dishwasher. Added stress ages the dishwasher faster.
Let’s get back to the warranty issue. Why are many warranties useless?
Warranties are often just another way for retailers to get you to pay more. Don’t get caught up in this back-end fee and cut it out completely.
Look at the appliance’s track record. If it’s good, you’re okay. Check with [tag-tec]Consumer Reports [/tag-tec] and see what the best appliances are. (You should be reading that mag religiously anyway).
Read the find print on warranties. You might be in for a big surprise on what is not covered.
Over all, from our experience, warranties on appliances are a waste of money. If you buy reliable brands and you only use trusted repair people if you do have a problem you will save lots of money in the long run.