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. Above all, 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 Fairfax County, 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 property owners.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in savings to pay for repairs and other incidentals that occur during property management. Although the money is in our escrow account, the money belongs to the real estate investor. 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.
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.
Fairfax County Rental Management Resources
Basics
Elementary information about what property management in Fairfax County.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a dependable tenant in Fairfax County fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of fees associated with rental management in Fairfax County
Vetting
How Nesbitt Realty vets tenants for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Do you need understand more about the area?
Our Guide to Real Estate is a helpful resource for everyone who needs to learn more about Fairfax County and nearby areas. The Guide to Real Estate includes data regarding what has sold and what is currently listed, as well as many interesting facts that you may not be aware of. Not to mention, our Guide has many of the fundamentals of life in Fairfax County. Certainly, most of this is useful for buyers and sellers, but owners and renters will also find these tools to be very sobering.
Landlord Reference
a good archive for property owners in Fairfax County
- Before you move a tenant into your rental in Fairfax County
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Fairfax County landlord responsibilities
- Maintenance, repairs & inspections for your property in Fairfax County
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting renters in Fairfax County