Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our property management and real estate business uses to fund 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 Sequoyah, 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 property owners.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in escrow 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 landlord.
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.
Real estate investors 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.
Sequoyah Property Management Resources
Basics
Fundamental info about what management services in Sequoyah.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a dependable tenant in Sequoyah fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
An overview of prices of property management services in Sequoyah
Vetting
How Nesbitt Realty vets tenants for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Do you want understand more about our local real estate market?
Nesbitt Realty's Guide to Real Estate is a free resource for anyone who wants to learn more about Sequoyah and nearby communities. The Guide to Real Estate provides data about what has sold and what is for sale, and many shocking facts that you might not know. Not to mention, our Guide highlights quite a few of the elements of living in Sequoyah. As might be expected, all of this is interesting for buyers and sellers, but owners and renters should also find these resources to be quite informative.
Landlord Reference
a useful archive for property owners in Sequoyah
- Before you put a renter in your investment in Sequoyah
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your rental manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Sequoyah landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Sequoyah
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting tenants in Sequoyah