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 The Boro, 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 buyers (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 escrow to pay for repairs and other incidentals that occur during rental management. Although the money is in our escrow account, the money belongs to the landlord. 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.
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.
The Boro Rental Management Resources
Basics
Elementary info regarding management services in The Boro.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a dependable tenant in The Boro fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A list of prices of rental management services in The Boro
Vetting
How Nesbitt Realty checks the backgrounds of renters for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you want understand more about this local real estate market?
Our Guide to Real Estate is a helpful resource for anyone who needs to review important real estate information about The Boro and nearby communities. The Guide to Real Estate compiles information regarding what has sold and what is on the market, as well as a couple of interesting facts that you might not know. And, our Guide highlights many of the assets of living in The Boro. As a matter of course, most of this is useful for buyers and sellers, but real estate investors and tenants will probably also find the facts to be very enlightening.
Landlord Reference
a good reference for property owners in The Boro
- Before you rent out your rental property in The Boro
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a renter breaks the lease
- How does the rental investor get paid?
- How your management company handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- The Boro property owner responsibilities
- Maintenance, repairs & inspections for your property in The Boro
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting renters in The Boro