Do you know the difference between contingency reserves and operating funds?
Operating funds are funds 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 Brentwood, 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 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.
Brentwood Rental Management Resources
Basics
Basic info regarding management services in Brentwood.
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 Brentwood fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A list of prices of rental management services in Brentwood
Vetting
How Nesbitt Realty checks the backgrounds of renters for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage property?
Clients
Who uses Nesbitt Realty management services?
Do you want know more about this community?
Our Guide to Real Estate is a handy tool for everyone who wants to find out more about Brentwood and neighboring areas. The Guide to Real Estate has data regarding what has sold and what is for sale, and many compelling facts that you may not be aware of. Not to mention, our Guide highlights quite a few of the elements of residing in Brentwood. As a matter of course, all of this is interesting for buyers and sellers, but rental investors and renters will also find these resources to be quite informative.
Landlord Reference
a free reference for rental investors in Brentwood
- Before you put a renter in your property in Brentwood
- 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 rental investor get paid?
- How your rental manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Brentwood rental investor responsibilities
- Maintenance, repairs & inspections for your property in Brentwood
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting tenants in Brentwood