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. But even so, 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 Herndon, 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 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 repairs and other incidentals that occur during property management. Although the money is in our escrow account, the money belongs to the property owner. When 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.
Real estate investors 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.
Herndon Property Management Resources
Basics
Elementary information regarding rental managment in Herndon.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a dependable tenant in Herndon fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
An overview of fees associated with rental management services in Herndon
Vetting
How Nesbitt Realty vets renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about the community?
Nesbitt Realty's Guide to Real Estate is a handy tool for everyone who wants to investigate real estate facts about Herndon and neighboring communities. The Guide to Real Estate compiles facts about what has sold and what is for sale, as well as some shocking facts that you may not be aware of. Not to mention, our Guide has quite a few of the assets of living in Herndon. Definitely, all of this is interesting for buyers and sellers, but real estate investors and renters will likely also find these tools to be very useful.
Landlord Reference
a good archive for rental investors in Herndon
- Before you move a tenant into your rental property in Herndon
- Collections and evictions
- Communications with the renter
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the landlord get paid?
- How your property manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Herndon landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Herndon
- 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 renters in Herndon