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 pay for our business. Operating funds are our money. But, 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 Greenhouse, 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 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 real estate investor. If 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.
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.
Greenhouse Rental Management Resources
Basics
Elementary info about what property management in Greenhouse.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a reliable renter in Greenhouse fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A breakdown of fees associated with rental management in Greenhouse
Vetting
How Nesbitt Realty vets renters for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you want know more about this area?
Nesbitt Realty's Guide to Real Estate is a helpful tool for anyone who hopes to learn more about Greenhouse and surrounding areas. The Guide to Real Estate provides facts regarding what has sold and what is for sale, as well as a couple of interesting facts that you might not know. Also, our Guide spotlights some aspects of life in Greenhouse. Naturally, all of this is useful for purchasers and sellers, but owners and renters will likely also find these resources to be somewhat enlightening.
Landlord Reference
a good source for rental investors in Greenhouse
- Before you lease out your rental property in Greenhouse
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the owner get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- Greenhouse property owner responsibilities
- Maintenance, repairs & inspections for your property in Greenhouse
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When owners don't yet know their new address
- Vetting renters in Greenhouse