Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to fund 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 Tuckahoe Park, 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 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 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.
Tuckahoe Park Property Management Resources
Should you know more about this area?
Our Guide to Real Estate is a helpful resource for everyone who hopes to investigate real estate facts about Tuckahoe Park and neighboring communities. The Guide to Real Estate provides data about what has sold and what is currently listed, as well as some interesting facts that you may not know. In addition, our Guide features many of the fundamentals of living in Tuckahoe Park. As a matter of course, all of this is interesting for buyers and sellers, but rental investors and renters may also find this information to be quite informative.
a handy archive for rental investors in Tuckahoe Park
- Before you put a renter in your rental property in Tuckahoe Park
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the rental investor get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Tuckahoe Park rental investor responsibilities
- Maintenance, repairs & inspections for your property in Tuckahoe Park
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When property owners don't yet know their new address
- Vetting renters in Tuckahoe Park