Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our property management and real estate business uses to fund our business. Operating funds are our money. Nevertheless, 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 Riverside, 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 buyers (and sometimes sellers) as we'll as contingency reserve funds for landlord clients.
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 property management. Although the money is in our escrow account, the money belongs to the property owner. 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.
Property owners 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.
Riverside Rental Management Resources
Basics
Fundamental information regarding rental managment in Riverside.
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 Riverside fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A breakdown of fees associated with rental management in Riverside
Vetting
How Nesbitt Realty checks the backgrounds of tenants for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about this local real estate market?
Our Guide to Real Estate is a free tool for everyone who needs to learn more about Riverside and surrounding areas. The Guide to Real Estate compiles data regarding what has sold and what is on the market, and a few compelling facts that you may not be aware of. And, our Guide highlights some fundamentals of living in Riverside. Definitely, most of this is useful for buyers and sellers, but landlords and tenants will likely also find these resources to be very useful.
Landlord Reference
a handy reference for rental investors in Riverside
- Before you lease out your rental property in Riverside
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Riverside owner responsibilities
- Maintenance, repairs & inspections for your rental property in Riverside
- 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 tenants in Riverside