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. 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 Manchester Lakes, 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 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 landlord. When the property management ends, that money is promptly returned to the real estate investor.
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.
Manchester Lakes Property Management Resources
Basics
Basic information about what property management in Manchester Lakes.
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 Manchester Lakes fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A list of prices of property management services in Manchester Lakes
Vetting
How Nesbitt Realty checks the backgrounds of renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage property?
Clients
Who uses Nesbitt Realty management services?
Do you need know more about this area?
Our Guide to Real Estate is a free tool for everyone who needs to find out more about Manchester Lakes and neighboring areas. The Guide to Real Estate provides data regarding what has sold and what is on the market, as well as a couple of compelling facts that you may not know. And, our Guide spotlights some aspects of life in Manchester Lakes. As might be expected, all of this is interesting for purchasers and sellers, but real estate investors and renters might also find these resources to be quite eye-opening.
Landlord Reference
a useful source for property owners in Manchester Lakes
- Before you rent out your property in Manchester Lakes
- Collections and evictions
- Communications with the renter
- 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 Realty & Management finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Manchester Lakes rental investor responsibilities
- Maintenance, repairs & inspections for your property in Manchester Lakes
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When owners don't yet know their new address
- Vetting renters in Manchester Lakes