Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to pay for our business. Operating funds are our money. On the other hand, escrow funds are different. Escrow funds are monies that Nesbitt Realty is holding on behalf of tenants, landlords, buyers and sellers. Escrow funds are not our money, but they are monies that we are trusted to safeguard. At any given time, Nesbitt Realty has hundreds of thousands of dollars in escrow accounts.
In Clover, the Commonwealth of Virginia requires that all real estate licensees manage escrow funds in a particular manner. Most importantly the Commonwealth requires that escrow funds are properly accounted for at all times. In additional all escrow funds must be kept separate from operating funds. The biggest portion of our escrow funds are tenant security deposits, but also hold deposits for purchasers (and sometimes sellers) as we'll as contingency reserve funds for real estate investors.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in savings to pay for maintenance and other incidentals that occur during rental management. Although the money is in our escrow account, the money belongs to the landlord. When the property management ends, that money is promptly returned to the property owner.
When a repair bill arises we use money in the contingency reserve account to pay that bill. When bills are paid in this manner the account is depleted. When the account is missing funds, at the end of the month when new rents are paid, Nesbitt Realty replenishes the count with money withheld from this rent. As property managers, Nesbitt Realty prepares a statement each month to show if/when money is depleted and how/when money is replenished into the contingency reserve account.
Landlords do not pay us money to set up the contingency reserve account. Instead, Nesbitt Realty withholds money from the first month of rent in order to set up the account.
Clover Rental Management Resources
Basics
Elementary info regarding rental managment in Clover.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a great tenant in Clover fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A list of fees associated with rental management in Clover
Vetting
How Nesbitt Realty checks the backgrounds of renters for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Should you know more about this area?
Our Guide to Real Estate is a helpful resource for everyone who needs to learn more about Clover and surrounding areas. The Guide to Real Estate has data about what has sold and what is on the market, and some shocking facts that you might not know. And, our Guide highlights some assets of life in Clover. Certainly, all of this is interesting for buyers and sellers, but real estate investors and tenants will likely also find this data to be very informative.
Landlord Reference
a handy reference for rental investors in Clover
- Before you lease out your property in Clover
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the owner get paid?
- How your rental manager handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for property owners using our rental management
- How Nesbitt Realty & Management manage keys
- Clover rental investor responsibilities
- Maintenance, repairs & inspections for your rental property in Clover
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting renters in Clover