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 and the builder warranty should cover this, why did you send your plumber?” Or, “My brother-in-law owns an HVAC company, I want you to use him.”
On the surface, each of these sounds like a reasonable request that would save money. I understand why owners ask. I’m a rental owner too, and I’ve had a home warranty on one of my own rentals. But after managing hundreds of rental doors in the Twin Cities, we’ve learned that routing repairs through home warranty companies, builder warranties, or owner-chosen vendors almost always costs more in the end, takes longer, and puts the owner, the tenant, and our company at risk.
This article explains why we keep maintenance inside our own process and vendor network, and why that protects your investment. If you’re wondering why we don’t let owners do their own repairs on occupied homes, I covered that separately in Rental Owners Doing Their Own Maintenance.
The short answer
Professional property management runs on process. When a tenant reports a problem, we need a vendor who will get the work order through our software, contact the tenant directly, get into the home, report back on what they found, finish the job, and upload an invoice so the owner is billed within days. Every outside party that won’t work inside that process (a warranty company, a builder’s service department, or an owner’s handyman) breaks it. Broken processes mean slower repairs, more phone calls, frustrated tenants, and more legal exposure for you.
Why process matters so much in property management
When you own one or two rentals, you can keep track of every repair in your head. When you manage hundreds of homes, you can’t. Speed, communication, and follow-through only happen consistently 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 when you add up the conversation with the tenant, coordinating the vendor before and after, confirming the fix, updating the owner, and handling the accounting. Our process keeps that time as low as possible. It only works because our vendors have agreed to it.
Good vendors are hard to find, and they need volume
Finding vendors who meet our standards is one of the hardest parts of this business. We need people who are professional, communicate well, respond quickly, do quality work, and charge a fair price. Most handymen and contractors we’ve tried don’t meet all of those standards. (We wrote about what we look for in Tips for Hiring a Good Handyman.)
The vendors who do meet the bar are willing to learn our software and follow our process because we send them steady work. That volume is what earns their responsiveness. A vendor who gets one job a month from us, or one job a year from a single owner, has no reason to use our app, update us on progress, or move us to the top of their schedule. That’s not a knock on them. It’s just how small businesses prioritize.
Why we don't use owner-preferred vendors
We hear requests like these all the time:
- “My pest control guy has been out to this house before. Please use him.”
- “I own a construction company, send the work to us.”
- “I have a handyman who is cheaper than yours.”
To one owner, it’s a single, simple request. To a property manager, it’s one more exception to track across hundreds of owners, each with their own vendor for their own trade. Multiply that across a full portfolio and you get a system nobody can run reliably. Even if we could track every owner’s preferred vendor perfectly, we’d still be working with someone outside our software who doesn’t report back, doesn’t contact the tenant on our timeline, and doesn’t answer to us.
Here’s what typically happens when an outside vendor doesn’t perform:
- The tenant calls us asking why nobody has shown up.
- We call the vendor, leave messages, and chase them for a date.
- We call the tenant back with an update, often more than once.
- The tenant gets frustrated and contacts the owner, or leaves us a bad review.
- We spend more time explaining to the owner why their vendor didn’t meet expectations.
All of that is administrative overhead that doesn’t fix anything, and it isn’t scalable. It also puts our reputation on the line for the work of someone we didn’t choose and can’t manage.
Annual HVAC servicing is a good example
Some owners ask us to send their annual furnace and AC tune-up to their own HVAC company. It seems like the simplest exception to allow, since it’s routine and scheduled in advance. But it has the same problems. The outside company isn’t working in our software, often doesn’t confirm the visit or report back what it found, and we’re left chasing them for details.
We’ve set up a custom program with our HVAC vendor to keep annual servicing as affordable as possible. Because they work closely with us, their visit covers more than a basic tune-up. While they’re at the house, they check and change the furnace humidifier filter, test the sump pump, and take care of other needs specific to that home. A third-party vendor who doesn’t work closely with us usually won’t do those things, and small items like a dead sump pump or a clogged humidifier filter are exactly what turn into expensive problems later.
Licensing and permits aren’t optional
There’s also a legal side. Plumbing and electrical work in Minnesota often requires a permit, and on a home that isn’t owner-occupied, the permit generally must be pulled by a licensed contractor. City guidance is blunt about it: it’s illegal for anyone who isn’t licensed, whether that’s the owner, a handyman, or any other vendor, to do electrical work on a property that is rented or occupied by others (City of Inver Grove Heights). A low-cost handyman may be talented, but if he isn’t licensed for the trade, he can’t legally do that work on your rental, and we can’t accept the liability of sending him. Every vendor we dispatch is vetted, insured, and licensed where the job requires it.
Why we don't use home warranty companies
Home warranties from companies like American Home Shield, Choice, and First American, along with utility repair plans like CenterPoint Energy’s Home Service Plus, are marketed as a way to protect you from big repair bills. For an owner who lives in the home and can wait a week or two for a repair, they sometimes make sense. For a rental with a tenant living in it, they create problems we can’t manage well.
They’re slow
Warranty companies dispatch from their own list of contractors, on their own schedule. It’s common to wait days for a first visit, then wait again for a part to be ordered, and then wait for a second visit to install it. Other property managers report the same thing: one manager 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 don’t take warranty jobs at all, and the ones who do often fit them in around better-paying work (Cissell Management).
I learned this firsthand. A refrigerator failed 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 told me the earliest visit was a week out. After that, they would diagnose it, order a part, wait for it to arrive, and come back. The tenant was understandably upset, 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 could have a technician there the next day.
In Minnesota, slow repairs create legal risk
This is where home warranties go from inconvenient to risky for a rental. 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 at least 24 hours before filing, and hearings are usually held 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, not the warranty company.
The coverage is thinner than most owners realize
Home warranty companies are businesses. They make money when the premiums and service fees they collect are greater than what they pay out. That isn’t a criticism, it’s simply the model, and it explains a lot about the experience:
- You pay twice. There’s a monthly premium, often $30 to $120 a month, plus a service fee of $100 or more every time a technician comes out, even if the claim is denied (NerdWallet).
- Payouts are capped. Many 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). A cap like that may cover only half of a real replacement.
- Exclusions are long. Pre-existing conditions, “improper maintenance,” code upgrades, and many components are commonly excluded. Some plans also limit eligibility to owner-occupied homes.
- Repair is favored over replacement. Several managers report warranty contractors patching a failing system repeatedly instead of replacing it, with the tenant living through each breakdown (Pensacola Realty Masters). In one example, a warranty approved only a $400 to $600 part for a 16-year-old air conditioner with a failed compressor and a clogged coil, instead of replacing the system, leaving the owner with a unit likely 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, which means about 45 cents of each dollar customers paid went back out as repairs (Frontdoor).
Most owners we’ve worked with spend more on premiums and service fees than they get back in covered repairs. Our suggestion is simple: cancel the warranty, put that monthly premium into your maintenance reserve, and let us handle repairs with vendors who show up. Allow us to make the best recommendation for you. Oftentimes that will be replacing an aging appliance instead of repairing it over and over and spending a lot of money on technician labor.
There is one situation where a home warranty can make sense: when you’re selling a home, a warranty can give the buyer some peace of mind during their first year. For a rental with a tenant living in it, it’s the wrong tool.
What about CenterPoint’s handyman service?
CenterPoint and other utilities also offer handyman-style programs. The issue is the same. It’s one more outside vendor that doesn’t use our software, doesn’t report back to us, and doesn’t answer to our maintenance team. It adds overhead without solving the problems above.
Why we don't use new construction builder warranties
Owners of newer homes often expect the builder to cover repairs. Sometimes the builder does, but in practice builder warranties are hard to use on an occupied rental.
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.
Each builder may also offer its own warranty on top of that, with different terms and dates. To use any of it, we’d need to know the home’s warranty start date, which category the problem falls into, and the builder’s claim process, for every new home we manage. That’s another one-off exception for us to track, and tracking one-off exceptions for every owner is basically impossible to do well at scale. When exceptions slip through the cracks, the result is a mess that leads to unhappy conversations with owners that everyone would rather avoid.
The fine print matters too. 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). A lot of what breaks in a rental during its first couple of years, like a clogged drain, a loose hinge, a tripped breaker, or a worn faucet cartridge, is everyday wear and maintenance that a builder warranty was never going to cover.
Builder service departments also tend to move slowly and on their own calendar. They won’t use our work order system, won’t coordinate access with the tenant the way we need, and can’t meet Minnesota’s emergency repair timelines. When a tenant has a habitability problem, we can’t wait on them.
Our tip for owners of newer homes: 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.
"Couldn't you just charge more to manage it?"
It’s a fair question. In theory, we could build a separate track for owner-specific vendors and warranty claims and charge an extra fee for the added time. But for the added overhead to make sense for our company, we’d need to charge a price that wouldn’t make sense for the owner to pay. And a fee doesn’t fix the underlying problems. The warranty company still controls the schedule. The outside vendor still doesn’t report back. The tenant still waits. Minnesota’s emergency repair laws still apply. We’d be charging owners more for slower, riskier repairs, and we don’t think that’s a good deal for anyone.
What this means for you as an owner
When you hire Freedom Rental Property Management, you’re hiring us to manage maintenance on your behalf. We’re rental owners ourselves, and we use the same vendors on your property that we use on our own. Our vendors 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 leave), and keeps you out of court. If you have a home warranty today, we recommend canceling it and putting the premium toward your maintenance reserve. If you have a builder warranty, use it before your home is rented. And if you know a great vendor, send them our way. We’re always recruiting, and if they meet our standards and want steady work, we’d be glad to talk with them.
Have questions about how we handle maintenance? Contact us, or see what your home could rent for with a free rental analysis.
