Millennials: Here’s What a Home Warranty Is, and Why You Need One
Members of the millennial generation are known for a few things: they like coffee and skinny jeans (sorry, we’re generalizing a little here), they change jobs more often than their parents did, and, they like to move around a lot, which means they tend to renters versus buyers.
Millennials Love to Rent—Everything
Millennials are seeking less expensive and more affordable alternatives to ownership. Maybe it’s their looming student loan debt or their transient, non-committal nature – whatever you want to chalk it up to, the rental tendencies of millennials extends far beyond the housing market. It’s the millennial generation, after all, that disrupted traditional retail markets when they started renting their clothes, accessories, and handbags through subscriptions services. But, not everything you read about millennials is true.
Who Are Millennials Exactly?
Millennials are teenagers, twenty- and thirty-somethings born between the early 1980s and the 1990s. Their generation is also known as “Generation Y” since they fall after the Baby Boomers (those born between 1946-1964) and Generation X (those born in the early to mid ‘60s to early to mid ‘80s).
But despite some headlines, millennials are surprisingly good with money – including having a savings account and putting away for retirement – and they’re also the generation most likely to say they’d like to buy a home to rent it out for extra income.
So, if you’re a millennial and you’re thinking about buying your first home – whether to live in as your primary residence or to rent out for extra income – here’s something you should know.
Millennials: When You Buy a House, You’re the Landlord Now
As a renter, there was always the option to just pick up the phone and call the landlord. As a homeowner, there’s no such thing. Now, you’re the landlord.
Luckily, however, there’s something that can help. For the millennial who decides to go from renter to homeowner (and maybe even to landlord themselves), a home warranty is the next best thing to having someone to call and fix something that’s broken down. In fact, that’s exactly what it’s there for.
Not to be confused with homeowners insurance – which you’ll likely come across as you Google what you’ll need to buy as a new homeowner – a home warranty is a service contract that protects your home’s systems and appliances. It’s optional coverage – unlike homeowners insurance – and it’s great to have, especially as a first-time homeowner.
Here’s why you need a home warranty as a millennial:
It Saves You Money: One costly and unexpected repair (let alone multiple systems falling apart at the same time) can send any new homeowner into a stressful financial tailspin. A home warranty is a safety net that ultimately saves you money over time as systems breakdown or wear out the longer you own your home.
Monthly Fees Keep You Fully Covered: For a monthly fee, a home warranty covers the costs of repairing or replacing almost any malfunctioning system in your home. These plans can include certain home systems, like HVAC and electrical, or protect certain appliances like washing machines and clothes dryers. Combination plans that include home systems, appliances, and additional add-on coverage are also common. Home warranties are particularly great for first-time homeowners who are used to calling a landlord for these types of breakdowns – you can consider them your new backstop.
It Saves You Time and Energy: Millennials are a working generation. If something goes wrong with the plumbing or the electrical, a millennial may not have time to call around to gather quotes and bids or be able to wait through those long “noon to 4 p.m. windows” for the technician to show up. With a home warranty, millennials don’t have to worry about calling around for a contractor or gathering estimates for repairs. In many cases, the home warranty company will send a vetted service contractor the company trusts to take care of the job for you.
Since more than 92 percent of millennials own smartphones, this generation is more than adept at scanning, scrolling, and surveying top companies based on online reviews and ratings. But for a service you’re not familiar with assessing, knowing where to start can be daunting. Here are 5 Tips to Consider When Shopping for a Home Warranty to get you started.
A home warranty is great for millennials who want the on-hand service and cost protection they’re used to from their days of renting. For all those renters who enjoyed the peace of mind knowing they could always call someone when they had an issue, a home warranty truly is the next best thing.