Cinch
A Home Warranty Solution For Build To Rent Communities
Home Warranties are a Great Investment for Community Developers
Renters in many markets are taking advantage of the rising number of Build to Rent (BTR) Communities. BTR appeals to a broad range of renter demographics that are looking for an improved living experience. Many new investors are understanding the appeal as well.
Research shows that more millennials are choosing to rent homes because it allows them greater flexibility and more opportunity to enjoy their lives without many of the typical burdens of home ownership. The millennial household is less interested in taking care of a home than previous generations, and more interested in having the time to pursue other interests. Similarly, BTR appeals to seniors because it allows for their equity to be cashed out while simultaneously upgrading their home’s features and surroundings. Seniors are typically downsizing in favor of single-story homes, community amenities and easy maintenance.
Universally, one of the biggest challenges for investors in rental properties is typical repairs and maintenance items, estimated to be up to 15% of the rental value of the unit. As a safety net, BTR community developers should consider investing in a home warranty product to effectively manage these costs.
“Home warranties for BTR units are a great investment for community developers,” said Adam Brown, Vice President at Cinch Home Services. “A Cinch new home construction warranty is purchased at closing and covers the property for mechanical breakdowns for major systems and appliances for years two through four of home ownership.”
Typically, developer agreements require manufacturers to be responsible for any breakdowns or malfunctions during the first year, with the home warranty company then assuming responsibility after year one. After the fourth year, the warranty may be renewed on an annual basis. Developers can cover years two through four for a cost commonly less than the fifth-year renewal, making the new construction warranty a viable consideration for both the developer and occupant.
Cinch home warranties are available in the continental U.S. and provide developers a cost-effective solution for managing potential system and mechanical breakdowns in their portfolio. Coverage includes central air conditioning and heating systems, central vacuum systems, electrical systems, garage door openers, jetted bathtubs, kitchen and laundry appliances, plumbing systems (including clearing plumbing stoppages) and sump pumps and water heaters. Optional coverage can be purchased for outside water, sewer and gas lines, pools and spas, water softeners, and well pumps. Deductibles are available in the amounts of $100 or $200 per service job.
Specific features in the new home warranty that BTR community developers will appreciate include Cinch’s lodging reimbursement. Renters are reimbursed up to $1,200 for a hotel/motel stay if their central cooling or heating system is non-operational for 24 hours or more from the time of the first contractor visit. Another benefit BTR developers can utilize is Cinch’s emergency locksmith/lockout service reimbursement.
“Home warranty claims can be made by the landlord or tenant and make repair and replacement a much easier process to manage,” said Brown. “Cinch provides BTR developers convenience as well as cost certainty for the first four years. When things break down, contact Cinch 24/7 and we will match you with a prescreened licensed professional to get the job done.”
The ongoing Covid-19 pandemic has kept more Americans at home, with many planning to continue working from home even after the pandemic ends. Furthermore, as more seniors retire from the workplace, they will be replaced with a younger workforce less interested in being geographically tied to their employers. It is intuitive to believe that the rental market will respond with exponential growth, placing an even greater demand for BTR community development.
More people working from home translates to more home maintenance needs. “At Cinch, we have seen a marked increase in appliance claims in the last year and attribute it to more people at home simply using their appliances with greater frequency,” said Brown. “We believe this trend will continue well into the future.”
Renting makes trendier, more desirable areas more accessible to all. Yardwork, maintenance, repairs, upkeep…all contribute to significant cost and time associated with owning a home. For many individuals, passing these responsibilities to a landlord can be a huge upside decision. Similarly, a landlord can utilize a home warranty for 24/7 emergency calls to buffer the challenges of managing an entire BTR community.
As a member of the National Home Service Contract Association, Cinch has been serving the real estate community for over 40 years, manages the nation’s largest network of service professionals, and proudly offers the industry’s only 180-day service guarantee. Cinch serves nearly one million homeowners across the contiguous 48 states and can handle your homes as well.
If you have any questions regarding home warranties for any type of dwelling, contact Adam Brown, Vice President at Cinch Home Services, at adbrown@cinchhs.com.
Adam Brown is the VP of Cinch Real Estate. Adam leads Cinch’s field sales efforts throughout the nation. He and his team are engaged in a variety of partnerships and support residential real estate transactions.
Before Cinch, Adam was senior manager at Direct Energy, where he led the strategic sales team with energy revenue of $250 million per year by engaging partners such as Amazon, Google, Yelp and IAC.
In 2017, Adam served as head of strategic sales for Direct Energy’s Home Warranty of America, and prior to that, he served as head of strategic sales for Direct Energy’s three home-service brands: One Hour Heating and Air, Mr. Sparky and Benjamin Franklin Plumbing. Adam also served as the head of sales and marketing for Newpoint Media Group.
