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 fund 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 The_phoenix, 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 savings 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 landlord. 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.
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.
The_phoenix Rental Management Resources
Basics
Basic info about what rental managment in The_phoenix.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a reliable tenant in The_phoenix fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of fees associated with property management services in The_phoenix
Vetting
How Nesbitt Realty checks the backgrounds of renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you want know more about our area?
Nesbitt Realty's Guide to Real Estate is a handy tool for anyone who needs to find out more about The_phoenix and surrounding communities. The Guide to Real Estate includes data about what has sold and what is for sale, and a couple of shocking facts that you might not be aware of. In addition, our Guide spotlights many of the fundamentals of living in The_phoenix. As a matter of course, all of this is interesting for buyers and sellers, but rental investors and tenants will probably also find the facts to be very enlightening.
Landlord Reference
a useful archive for property owners in The_phoenix
- Before you move a tenant into your investment in The_phoenix
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the owner get paid?
- How your property management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for landlords using our property management
- How Nesbitt Realty & Management manage keys
- The_phoenix property owner responsibilities
- Maintenance, repairs & inspections for your rental property in The_phoenix
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting renters in The_phoenix