Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to fund our business. Operating funds are our money. Conversely, 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 Old Town Commons, 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 real estate investors.
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 property management. Although the money is in our escrow account, the money belongs to the landlord. If 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.
Old Town Commons Property Management Resources
Basics
Elementary information regarding management services in Old Town Commons.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a great renter in Old Town Commons fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of prices of rental management services in Old Town Commons
Vetting
How Nesbitt Realty checks the backgrounds of 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?
Should you understand more about our area?
Nesbitt Realty's Guide to Real Estate is a handy tool for anyone who wants to investigate real estate facts about Old Town Commons and nearby areas. The Guide to Real Estate compiles facts regarding what has sold and what is on the market, and many surprising facts that you may not be aware of. Also, our Guide has some aspects of life in Old Town Commons. Of course, most of this is helpful for buyers and sellers, but landlords and renters might also find these tools to be quite edifying.
Landlord Reference
a free archive for landlords in Old Town Commons
- Before you rent out your rental property in Old Town Commons
- Collections and evictions
- Communications with the renter
- During tenancy
- 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 manager handles utilities
- How Nesbitt finds renters
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Old Town Commons rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Old Town Commons
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When landlords don't yet know their new address
- Vetting renters in Old Town Commons