Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our property management and real estate business uses to pay for our business. Operating funds are our money. Still, 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 Inventory, 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 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. If 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.
Herndon Inventory Rental Management Resources
Basics
Basic info about what rental managment in Herndon Inventory.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a reliable tenant in Herndon Inventory fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A breakdown of prices of property management services in Herndon Inventory
Vetting
How Nesbitt Realty checks the backgrounds of tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about the area?
Nesbitt Realty's Guide to Real Estate is a helpful resource for anyone who needs to learn more about Herndon Inventory and surrounding communities. The Guide to Real Estate has facts regarding what has sold and what is for sale, as well as some compelling facts that you might not know. Furthermore, our Guide spotlights some assets of residing in Herndon Inventory. Naturally, most of this is interesting for purchasers and sellers, but property owners and tenants will likely also find these tools to be very enlightening.
Landlord Reference
a handy archive for landlords in Herndon Inventory
- Before you move a tenant into your investment in Herndon Inventory
- 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 owner get paid?
- How your property manager handles the association and your community
- How your rental manager handles utilities
- How Nesbitt finds tenants
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Herndon Inventory owner responsibilities
- Maintenance, repairs & inspections for your property in Herndon Inventory
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When owners don't yet know their new address
- Vetting tenants in Herndon Inventory