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 Riverwood, 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 repairs and other incidentals that occur during rental management. Although the money is in our escrow account, the money belongs to the property owner. 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.
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.
Riverwood Property Management Resources
Do you want understand more about the area?
Nesbitt Realty's Guide to Real Estate is a helpful resource for everyone who hopes to find out more about Riverwood and surrounding communities. The Guide to Real Estate includes data regarding what has sold and what is for sale, and many surprising facts that you may not be aware of. Not to mention, our Guide has some benefits of life in Riverwood. Of course, most of this is useful for purchasers and sellers, but owners and renters might also find the facts to be quite edifying.
a useful archive for rental investors in Riverwood
- Before you move a tenant into your rental property in Riverwood
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the owner get paid?
- How your management company 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
- Riverwood rental investor responsibilities
- Maintenance, repairs & inspections for your rental property in Riverwood
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting tenants in Riverwood