Every few months an owner asks us some version of the same question. “I already pay for an American Home Shield plan, can you just call them when something breaks?” Or, “My house is new, shouldn’t the builder warranty cover this?” Or, “My brother-in-law owns an HVAC company, can you use him?”
Fair questions. I’m a rental owner too, and I’ve had a home warranty on one of my own rentals. On paper, a warranty looks like it should save money. Once a tenant lives in the home and a property manager is handling repairs, it does the opposite: you pay more, the tenant waits longer, and you carry legal risk you didn’t sign up for.
Our goal on every repair is simple: done right, done fast, at a fair price. Below is how home warranties, builder warranties, and utility repair plans like CenterPoint Energy’s Home Service Plus measure up against that goal on a managed rental, and how your own vendors can fit in. If you’re thinking about doing repairs yourself on an occupied home, I covered that in Rental Owners Doing Their Own Maintenance.
The short answer
On a managed rental, a home warranty costs you more than it saves. Warranty companies send their own contractors on their own schedule, cap what they’ll pay, and exclude a long list of items, while Minnesota law still holds you responsible for fast repairs on heat, hot water, and refrigerators. Builder warranties are worth using, but they cover less than owners expect and move on the builder’s calendar. What works is one process: every request is triaged by your manager first, then sent to a licensed, insured vendor who reports back in the manager’s software. Your own vendor can be part of that if they’ll work inside that process.
Why process matters so much in property management
With one or two rentals, you can keep every repair in your head. With nearly 200 rental units, we can’t. Speed, communication, and follow-through only happen when everyone involved works the same way, every time.
Here’s what a normal repair looks like at Freedom:
- The tenant submits a maintenance request through our online portal.
- Our maintenance team triages it and assigns it to a vendor in our network.
- The vendor receives the work order in the same software, contacts the tenant, and schedules access.
- If there’s a delay, a part on order, or a bigger problem, the vendor updates our maintenance manager in the work order.
- When the job is done, the vendor uploads photos and an invoice, and it’s paid and posted to your owner statement.
Even a simple repair takes at least 45 minutes of staff time once you add up the tenant conversation, coordinating the vendor before and after, confirming the fix, updating the owner, and the accounting. Our process keeps that time down, and it only works because every vendor follows the same steps. That’s what gets your repair finished fast.
Good vendors are hard to find
Finding vendors who show up on time, communicate, and do great work at a fair price is one of the hardest parts of this business. Most handymen and contractors we’ve tried fall short on at least one of those. (Here’s what we look for: Tips for Hiring a Good Handyman.)
We’ve put years into building a group of vendors who meet all four, and they work with us regularly. They know our software, they follow our process, and because we send them steady work, they pick up the phone when your home needs something. That bench of vendors is a big part of what you’re paying a property manager for.
Can you use my preferred vendor?
Yes, if they’re a good fit. Plenty of owners have an HVAC company, a pest control company, or another trade they’ve trusted for years, and that relationship has value. Before we send them work, we’ll talk with them, and they’ll go through the same onboarding every one of our vendors does:
- Proof that they’re licensed for the trade, where Minnesota requires it.
- Proof of liability insurance.
- They work in our property management software: they receive work orders by text and email, contact the tenant to schedule, and update us in the work order.
- They finish the work promptly and tell us when it’s done, with photos and an invoice.
Those requirements protect you. When a vendor doesn’t show up or doesn’t report back, the tenant calls us asking why nobody has come, we chase the vendor for a date, the tenant gets frustrated, and the repair drags on. That burns goodwill with a good tenant and creates legal risk for you (more on that below). If a vendor doesn’t work out, we’ll tell you and send one of ours instead, so your repair still gets done.
Annual HVAC servicing
Annual furnace and AC tune-ups are one of the most common preferred-vendor requests we get, and if your HVAC company completes onboarding and reports back on each visit, we’re happy to use them. Compare what you get, though. We set up a custom program with our HVAC vendor to keep annual servicing affordable, and their visit covers more than a basic tune-up. While they’re at the house, they change the furnace humidifier filter, test the sump pump, and take care of whatever else that home needs. If you use your own company, ask them to do the same, because a dead sump pump or a clogged humidifier filter is exactly the small thing that turns into an expensive problem.
Licensing and permits matter on a rental
There’s also a legal side. Plumbing and electrical work in Minnesota requires a permit for most jobs beyond simple repairs, and on a home that isn’t owner-occupied, a licensed contractor has to pull it. City guidance is blunt: it’s illegal for anyone who isn’t licensed, the owner included, to do electrical work on a property that’s rented or occupied by others (City of Inver Grove Heights). A cheap handyman may be talented, but if he isn’t licensed for the trade, the liability for that work lands on you. That’s why proof of licensing is part of onboarding for every vendor who touches your home.
Why home warranties rarely pay off on a rental
Home warranties from companies like American Home Shield, Choice, and First American, and utility repair plans like CenterPoint Energy’s Home Service Plus, are sold as protection from big repair bills. For an owner who lives in the home and can wait a week or two for a repair, one might make sense. With a tenant living in the home, both the math and the timing work against you.
They’re slow
Warranty companies dispatch from their own list of contractors, on their own schedule. Expect to wait days for a first visit, wait again while a part is ordered, then wait for a second visit to install it. Other property managers see the same thing: one saw an AC and furnace replacement take over a week and a refrigerator replacement take two weeks through warranty companies (Qwest Property Management). Another investor canceled warranty contracts on all 15 of his rentals after vendors took up to 48 hours just to respond, called him instead of the tenant to arrange access, and charged a new service fee on each return visit (Inman).
Part of the reason is who does the work. Warranty companies pay contractors discounted rates, so many of the best local vendors won’t take warranty jobs, and the ones who do fit them in around better-paying work (Cissell Management).
I learned this the hard way. A refrigerator died in one of my rentals, the tenant’s food was spoiling, and I had a home warranty on the property. I called it in, and the dispatcher said the earliest visit was a week out. After that, they’d diagnose it, order a part, wait for it, and come back. My tenant was upset, and I didn’t blame her. So I hung up and called the same appliance repair company directly, planning to pay out of pocket. I got the same dispatcher. Without the warranty in the picture, she had a technician there the next day.
In Minnesota, slow repairs create legal risk
This is where a slow warranty claim goes from annoying to risky. Under Minnesota’s Emergency Tenant Remedies Action law (Minn. Stat. 504B.381), a tenant can go to court over the loss of heat, the loss of hot water, a nonfunctioning refrigerator, or a nonfunctioning air conditioner if AC is included in the lease. The tenant only has to try to notify the landlord 24 hours before filing, and the hearing is set within 3 to 7 business days (LawHelpMN).
If the court finds the landlord didn’t act, it can order immediate repairs, reduce rent until the work is done, order the owner to pay for a hotel, and award the tenant’s attorney fees. Landlords who willfully miss a court-ordered repair deadline face fines of $250, $500, and $750 for repeat failures, and a third failure within three years is a gross misdemeanor (Minn. Stat. 504B.391). “The warranty company hasn’t scheduled us yet” isn’t a defense. The responsibility stays with the owner and the manager.
The coverage is thinner than you think
Home warranty companies make money when the premiums and service fees they collect are bigger than what they pay out. That’s the business model, and it explains the experience:
- You pay twice. There’s a monthly premium of $30 to $120, plus a service fee of $100 or more every time a technician comes out, even when the claim is denied (NerdWallet).
- Payouts are capped. Plans cap what they’ll pay per system or appliance. CenterPoint’s Replacement Assistance Plan, for example, pays a fixed $1,625 toward a new furnace or central air conditioner and doesn’t cover installation, removal, or taxes (CenterPoint Energy). That’s about half of a real replacement.
- Exclusions are long. Pre-existing conditions, “improper maintenance,” code upgrades, and many components are excluded. Some plans won’t cover a home that isn’t owner-occupied at all.
- Repair is favored over replacement. Managers report warranty contractors patching a failing system again and again instead of replacing it, with the tenant living through each breakdown (Pensacola Realty Masters). In one case, a warranty approved only a $400 to $600 part for a 16-year-old air conditioner with a failed compressor and a clogged coil, leaving the owner with a unit that was going to fail again (Cissell Management).
The numbers back this up. Frontdoor, the parent company of American Home Shield, reported $2.09 billion in revenue in 2025 and $936 million in cost of services. About 45 cents of each dollar customers paid went back out as repairs (Frontdoor).
Put another way, the average customer pays a dollar to get 45 cents of repairs back. My advice: cancel the warranty and put that monthly premium into your maintenance reserve. When something breaks, we send a vendor who shows up fast and gives you a straight recommendation, and on an aging appliance that’s often “replace it” rather than paying for the third repair visit.
There’s one place a home warranty earns its keep: when you sell. It gives the buyer some peace of mind in their first year. On a rental with a tenant in it, your money does more in the reserve.
Do your tenants call CenterPoint Home Service Plus directly?
A lot of owners who come to us have CenterPoint Energy’s Home Service Plus (HSP). Here’s what it is and what it isn’t. HSP is an appliance and home-system repair program, not a handyman service. You can buy a monthly or annual plan that covers the furnace, boiler, air conditioner, water heater, and certain kitchen and laundry appliances, or call HSP for a one-time repair and pay for parts and labor. You don’t need a plan, or even CenterPoint gas service, to use them (CenterPoint Energy). HSP doesn’t do handyman work like patching drywall, fixing doors, or most maintenance outside of HVAC and appliances.
Owners tell us all the time that their tenants call HSP directly whenever something breaks. It feels convenient, but every repair request goes straight to a technician, unfiltered. Nobody checks whether a visit is needed before one is booked. Nobody confirms HSP covers the problem. And you don’t hear about it until the bill shows up.
Having a manager in the middle changes that. Every request comes to our maintenance team first, and we vet it before a vendor is scheduled. A surprising number of “broken” items have a free fix: a tripped breaker or GFCI outlet, dead thermostat batteries, a clogged furnace filter, a jammed garbage disposal that needs a reset, or a thermostat set to the wrong mode. When we can walk the tenant through it, the problem is solved the same day and you don’t pay for a service call. When a vendor is needed, we send the right one, with photos and notes, and we track the job until it’s done. That triage step is one of the biggest ways a property manager saves you money, and it only works when tenants send requests through us instead of calling a repair company.
Is a builder warranty worth using on a rental?
Yes. We manage a lot of new-construction homes, and we work with builder warranties regularly. Just know going in that a builder warranty covers less than owners expect, and it runs on the builder’s calendar, not your tenant’s.
In Minnesota, the statutory new home warranty runs for different lengths of time depending on what failed (Minn. Stat. 327A.02):
- 1 year for defects from faulty workmanship or defective materials.
- 2 years for faulty installation of plumbing, electrical, heating, and cooling systems.
- 10 years for major construction defects.
Builders add their own warranties on top of that, each with different terms and dates. To use any of it, you need the home’s warranty start date, the category the problem falls into, and the builder’s claim process, and then you wait for the builder to schedule. If a tenant is without something they need and the fix is a few hundred dollars, waiting on the builder rarely makes sense. We’ll fix it and move on.
Read the fine print. The law requires the homeowner to report a defect to the builder in writing within six months of discovering it, and it excludes normal wear and tear, failure to maintain the home, and damage from improper maintenance or alterations by others (Minn. Stat. 327A.03). Most of what breaks in a rental in its first couple of years, like a clogged drain, a loose hinge, a tripped breaker, or a worn faucet cartridge, is wear and maintenance a builder warranty was never going to cover.
Builder service departments also schedule on their own calendar. They don’t coordinate access with the tenant the way our vendors do, and they aren’t built around Minnesota’s emergency repair timelines. For a no-heat or no-hot-water call, we don’t wait on the builder.
The best time to use your builder warranty is while the home is vacant, before a tenant moves in. Do a thorough walkthrough, submit your claims in writing, and get those items fixed before we place a tenant. We’ll help you build the list.
Couldn't a property manager just work with the warranty company?
Some managers will. It doesn’t fix the problem. The warranty company still controls the schedule, the tenant still waits, and Minnesota’s emergency repair laws still apply. Every warranty claim also takes extra staff time to file, follow up, and coordinate, and a manager who handles them has to charge for that somewhere. You’d be paying a warranty premium, a service fee, and extra management time, all for a slower repair. That’s why we don’t work with home warranty companies.
What this means for you as an owner
When you hire Freedom Rental Property Management, you’re hiring us to run maintenance for you with one goal: repairs done right, done fast, at a fair price. We own rentals ourselves, and we use the same vendors on your property that we use on ours. They aren’t the cheapest and they aren’t the most expensive. They’re reliable, licensed where it matters, and they work inside a process that gets repairs done quickly and documented properly.
That consistency protects your investment, keeps good tenants renewing (poor maintenance is one of the top reasons tenants move), and keeps you out of court. So, if you have a home warranty today, cancel it and put the premium in your maintenance reserve. If you have a builder warranty, use it before your home is rented. If your tenants call CenterPoint’s Home Service Plus directly, let us take over that intake so every request gets vetted first. And if you have a vendor you trust, tell us. We’ll talk with them, walk them through onboarding, and if they’re a good fit, put them to work on your home.
Questions about how we handle maintenance? Contact us, or see what your home could rent for with a free rental analysis.
