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. In contrast, 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 Colonial Village, 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 landlord clients.
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 property owner. 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.
Real estate investors 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.
Colonial Village Rental Management Resources
Basics
Basic information about what rental managment in Colonial Village.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a reliable tenant in Colonial Village fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
An overview of prices of rental management in Colonial Village
Vetting
How Nesbitt Realty vets renters for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you need know more about the community?
Our Guide to Real Estate is a free tool for anyone who hopes to investigate real estate facts about Colonial Village and surrounding communities. The Guide to Real Estate provides data about what has sold and what is for sale, as well as a few surprising facts that you may not be aware of. Furthermore, our Guide features quite a few of the benefits of living in Colonial Village. Certainly, all of this is interesting for purchasers and sellers, but property owners and tenants will probably also find the facts to be very enlightening.
Landlord Reference
a handy source for rental investors in Colonial Village
- Before you lease out your rental property in Colonial Village
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the rental investor get paid?
- How your property management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Colonial Village property owner responsibilities
- Maintenance, repairs & inspections for your rental property in Colonial Village
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When property owners don't yet know their new address
- Vetting renters in Colonial Village