Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage 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 Tobacco Quay, 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 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 repairs and other incidentals that occur during rental management. Although the money is in our escrow account, the money belongs to the real estate investor. 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.
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.
Tobacco Quay Rental Management Resources
Basics
Fundamental information regarding management services in Tobacco Quay.
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 Tobacco Quay fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A breakdown of fees associated with rental management in Tobacco Quay
Vetting
How Nesbitt Realty vets tenants for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Do you need understand more about this area?
Our Guide to Real Estate is a free resource for everyone who hopes to find out more about Tobacco Quay and nearby communities. The Guide to Real Estate provides information about what has sold and what is on the market, and some shocking facts that you might not know. In addition, our Guide highlights quite a few of the benefits of life in Tobacco Quay. Of course, all of this is helpful for purchasers and sellers, but rental investors and renters will likely also find these resources to be somewhat eye-opening.
Landlord Reference
a useful archive for rental investors in Tobacco Quay
- Before you move a tenant into your rental in Tobacco Quay
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy 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 management company handles utilities
- How Nesbitt finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Tobacco Quay property owner responsibilities
- Maintenance, repairs & inspections for your rental property in Tobacco Quay
- 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 tenants in Tobacco Quay