Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to pay for 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 Chain Bridge, 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 property owners.
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 real estate investor. 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.
Chain Bridge Property Management Resources
Basics
Basic information regarding management services in Chain Bridge.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a dependable renter in Chain Bridge fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
An overview of fees associated with rental management in Chain Bridge
Vetting
How Nesbitt Realty checks the backgrounds of renters 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 the area?
Our Guide to Real Estate is a free tool for anyone who hopes to review important real estate information about Chain Bridge and neighboring areas. The Guide to Real Estate provides information about what has sold and what is currently listed, and a couple of compelling facts that you may not be aware of. Furthermore, our Guide spotlights quite a few of the fundamentals of life in Chain Bridge. Of course, most of this is useful for buyers and sellers, but owners and renters will likely also find this data to be somewhat sobering.
Landlord Reference
a free source for rental investors in Chain Bridge
- Before you rent out your rental property in Chain Bridge
- 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 landlord get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt finds renters
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Chain Bridge owner responsibilities
- Maintenance, repairs & inspections for your property in Chain Bridge
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When owners don't yet know their new address
- Vetting renters in Chain Bridge