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. In contrast, 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 Sentinel_of_Landmark, 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 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.
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.
Sentinel_of_Landmark Rental Management Resources
Basics
Fundamental info regarding property management in Sentinel_of_Landmark.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a great renter in Sentinel_of_Landmark fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A breakdown of fees associated with property management services in Sentinel_of_Landmark
Vetting
How Nesbitt Realty vets tenants for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about the community?
Our Guide to Real Estate is a free resource for everyone who needs to learn more about Sentinel_of_Landmark and nearby areas. The Guide to Real Estate provides data about what has sold and what is on the market, and a couple of shocking facts that you might not know. In addition, our Guide highlights some fundamentals of living in Sentinel_of_Landmark. As a matter of course, all of this is interesting for buyers and sellers, but real estate investors and tenants might also find the facts to be very informative.
Landlord Reference
a free archive for property owners in Sentinel_of_Landmark
- Before you rent out your property in Sentinel_of_Landmark
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy 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 management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Sentinel_of_Landmark property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Sentinel_of_Landmark
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting tenants in Sentinel_of_Landmark