I have come across many examples of landlords that require, in their lease, that the tenants carry an appliance service plan on the furnace, water heater, and kitchen and laundry appliances. In Minnesota, this is called Centerpoint Energy Service Plus. It costs about $8-15 per month, which is added to the tenant’s utility bill.
In the event that one of the covered appliances breaks, that “insurance policy” allows you to call Centerpoint and have a technician fix the broke unit. Only if the appliance is completely unrepairable will you incur a cost.
- The landlord shifts the cost of the plan to the tenants.
- You can virtually eliminate any appliance repair/replacement costs.
- The tenants can make the repair calls themselves without bothering you as the landlord.
- Confirming the tenant has put the service plan onto their utility bill is difficult to police.
- Some states this may not be legal.
- Some tenants will simply refuse.
- As you increase the number of properties you own, it is NOT cost effective to pay this yourself. With more than 10 units, I would be paying $150 per month in just service fees. That would only be effective if I have something break every month. Otherwise, I save the cash and just replace/repair units as needed.