Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage uses to fund our business. Operating funds are our money. Nevertheless, 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 Cherry Blossom, 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 landlord. When the property management ends, that money is promptly returned to the real estate investor.
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.
Property owners 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.
Cherry Blossom Rental Management Resources
Basics
Fundamental information about what property management in Cherry Blossom.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a reliable renter in Cherry Blossom 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 Cherry Blossom
Vetting
How Nesbitt Realty vets tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about this local real estate market?
Nesbitt Realty's Guide to Real Estate is a helpful resource for anyone who needs to learn more about Cherry Blossom and surrounding communities. The Guide to Real Estate has facts regarding what has sold and what is on the market, and some interesting facts that you might not be aware of. Not to mention, our Guide highlights many of the benefits of residing in Cherry Blossom. Naturally, most of this is useful for purchasers and sellers, but rental investors and renters might also find this information to be quite eye-opening.
Landlord Reference
a useful source for rental investors in Cherry Blossom
- Before you put a renter in your rental in Cherry Blossom
- 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 property owner get paid?
- How your management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- Cherry Blossom owner responsibilities
- Maintenance, repairs & inspections for your rental property in Cherry Blossom
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When landlords don't yet know their new address
- Vetting tenants in Cherry Blossom