Make Sure Your Appliances Are Covered While Living with Roommates

Housing prices have exploded since the COVID-19 pandemic, and that’s pushed many younger would-be homebuyers to the real estate sidelines. 

It’s gotten so bad that some have dubbed millennials the “roommate generation” for their continued practice of renting, living with their parents, or buying a home with the intention of renting part of it out. 

For many, renting a room is a strategic financial decision that affords them the opportunity to build long-term wealth while offsetting record-high home prices. 

But additional people inside the home means more wear and tear. And that’s where a home warranty can help. A home warranty can protect your wallet as a homeowner—and your friendships when you inevitably suffer a broken appliance from overuse. 

If you’re thinking about renting out a portion of your home, make sure you’re ready! Follow our guidance:

• Benefits of Renting Out Your Home
• Responsibilities of Renting Out Your Home
• Use A Home Warranty: Protect Your Home Systems and Appliances from Wear and Tear
• Rekey Coverage For Added Security
• Find the Right Home Warranty Today

Benefits of Renting Out Your Home

Renting an extra room or two provides multiple financial and social benefits. And even though there are a few disadvantages to having a roommate, the benefits outweigh the drawbacks. 

Renting a room:

1. Helps you pay down your mortgage. If you still have a monthly mortgage payment, rent payments can provide a welcomed revenue stream. 
2. Helps you build an emergency fund. That extra month cash injection isn’t just good for your mortgage; it’s valuable for anything. And for many people across the country, additional income is perfect for creating an emergency fund for car repairs, hospital bills, job loss, or home repairs (though a home warranty can certainly help on that front).
3. Built-in companionship. Having a tenant or roommate gives you a neighbor right under your roof. And if you’re on good terms with that individual, their presence means a nearby friend or companion, which can make your home feel more active and less lonely. 

Responsibilities of Renting Out Your Home

Renting out a spare room in the home you own and live in yourself is a little different than splitting rent on an apartment. 

1. Maintenance and repairs. For one thing, you, the homeowner, will be responsible for maintenance and upkeep of the property — you have to keep it in good shape so that your roommates will feel safe and comfortable enough to continue living there. 

By the same token, if your roommates damage the property, you’ll be responsible for repairs, and if the repairs aren’t made, it’ll come out of your profits when you sell the house.

2. Evictions. Being a landlord sometimes means making the difficult decision of evicting tenants who fall behind on their rent or break the lease agreement. 

This sort of confrontation can feel difficult. Remember that a lease agreement is ultimately a business agreement, and your income is at risk with rowdy or irresponsible tenants.

3. Developing a legal lease agreement with clear expectations. Your lease should clearly outline:

• How many people are allowed to live in the property
• Who is allowed to live in the property
• Monthly rent amount
• When rent is due
• The tenant’s responsibilities for general upkeep
• The tenant’s responsibilities for utilities, if any

4. Insurance and liability considerations. Renting out rooms in your home may open you up to liability from a home insurance standpoint. If your roommate invites someone over and that person gets injured on the property, for example, you may find yourself involved in a lawsuit. 

If your home gets struck by lightning and burns to the ground, your possessions will be covered by your homeowner’s insurance, but your roommate’s stuff won’t. 

For these reasons, it’s a good idea to require lodgers to get their own renter’s insurance policies to cover their personal possessions and personal liability. You should also give them a lease agreement with clear expectations for things like pets and overnight guests.

5. Finding responsible tenants. Because you’ll depend on your roommate for rental income, you’ll want to find reliable occupants for your spare room or rooms. Not only that, but because you’ll be living there too, they will need to be people that you feel comfortable with and can trust. 

That can be difficult, and it may mean that spare rooms will need to remain empty while you search for suitable occupants. This will affect the amount of rental income you can expect, and could make it less regular. 

You should plan for this by buying a home that you know you can afford on your own. Lenders won’t consider potential future rental income when choosing whether and how much money to loan you for a home purchase, so if you can qualify for a mortgage, you should be able to afford it, at least in theory.

Use A Home Warranty: Protect Your Home Systems and Appliances from Wear and Tear

One of the hidden expenses of having a roommate when you’re a homeowner is the wear and tear they can place on your home systems and appliances. 

If you buy a three-bedroom house and rent out the extra two bedrooms, that’s at least two more people cooking on your stove, using your refrigerator, and taking showers with your hot water. 

If you rent to couples or a parent with children, the strain on your home systems and appliances multiplies. 

Cover yourself with a home warranty from American Home Shield®.

How A Home Warranty Works

A home warranty for your rental property works by providing coverage to appliances and home systems—offsetting your out-of-pocket costs when breakdowns due to normal wear and tear strike.disaster strikes. 

You can help protect parts of up to 231 home systems and appliances even if you have roommates. We offer plans to cover your home appliances and, your home systems., or both. 

Appliance coverage will defray the cost of repairing or replacing components of up to 910 appliances, including your refrigerator, range, built-in microwave, dishwasher, garbage disposal, clothes washer and dryer, and more. The Systems Plan will cover components of up to 11 of your home systems, including your HVAC, electrical and plumbing. 

You can also choose the Combo Plan, which combines both plans (up to a 30% discount), or pick and choose the coverage you want when you build your own plan. Our appliance plans cover duplicate appliances, so if you have multiple refrigerators, for example, you can still get both of them fixed under your home warranty. You can even add coverage for guest units, septic and well pumps, pools and spas, or electronics.

How Much is a Home Warranty? 

Our flexible payment plans make it easy to fit the cost of a home warranty into your budget. 

Check out our plans to get a quote. Our ShieldSilver option—our most affordable plan—protects parts of 14 major systems to help keep your home running. Compare that to the ShieldGold (23 systems and appliances) or the ShieldPlatinum (23 systems and appliances plus roof leak repair coverage and other member perks).

How Do You Use A Home Warranty?

Here’s how your home warranty works when it’s needed:

1. When a covered item breaks, you can call our toll-free number or request service online.
2. 2. We will arrange to send a technician from our network of contractors to help with your issue. 
3. You’ll pay a trade service call fee to the technician, and they’ll diagnose the problem and contact us. 
4. We will determine whether your problem is covered by your home warranty plan, and then the technician will repair or replace your equipment up to your plan limits. 

Buying a home warranty plan will benefit everyone who lives in your home, and it could help you keep your reliable tenants around longer because it will help you keep your home in good condition.

Rekey Coverage For Added Security

When a roommate moves out, as roommates sometimes do, American Home Shield’s Rekey coverage allows you to affordably change the locks, minimizing your costs and ensuring that former residents no longer have access to your home. Use the AHS rekey service for quick and timely installation!

Find the Right Home Warranty Today

Renting out spare rooms in your home is a great way to earn extra money. A home warranty from American Home Shield can help you keep more of that money in your pocket by defraying the costs of repairing home systems and appliances as they break down. With a home warranty on your side, your rental income can make a real difference in your life. Find out what’s covered in our plans or check out our coverage.

AHS assumes no responsibility, and specifically disclaims all liability, for your use of any and all information contained herein.