Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our property management and real estate business uses to fund our business. Operating funds are our money. Nevertheless, 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 West End, 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 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 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.
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.
West End Rental Management Resources
Basics
Elementary info regarding property management in West End.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a great renter in West End fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A list of prices of rental management services in West End
Vetting
How Nesbitt Realty vets renters for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Do you need understand more about our area?
Our Guide to Real Estate is a helpful resource for anyone who hopes to investigate real estate facts about West End and neighboring areas. The Guide to Real Estate provides data about what has sold and what is on the market, as well as a few interesting facts that you may not know. Also, our Guide features many of the fundamentals of life in West End. Certainly, all of this is interesting for purchasers and sellers, but landlords and tenants will likely also find these tools to be very eye-opening.
Landlord Reference
a useful source for landlords in West End
- Before you put a renter in your rental in West End
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your property management company handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- West End property owner responsibilities
- Maintenance, repairs & inspections for your property in West End
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting tenants in West End