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 pay for our business. Operating funds are our money. On the other hand, 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 Arlington Ridge, 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 escrow to pay for repairs 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 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.
Arlington Ridge Property Management Resources
Do you need understand more about the local real estate market?
Nesbitt Realty's Guide to Real Estate is a free resource for anyone who needs to investigate real estate facts about Arlington Ridge and surrounding areas. The Guide to Real Estate includes information regarding what has sold and what is for sale, as well as many shocking facts that you might not know. In addition, our Guide features some fundamentals of residing in Arlington Ridge. Certainly, all of this is useful for buyers and sellers, but landlords and tenants may also find this information to be quite sobering.
a good reference for property owners in Arlington Ridge
- Before you rent out your property in Arlington Ridge
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Arlington Ridge property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Arlington Ridge
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When owners don't yet know their new address
- Vetting renters in Arlington Ridge