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. 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 Fox Lake, 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 escrow to pay for maintenance and other incidentals that occur during property management. Although the money is in our escrow account, the money belongs to the property owner. 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.
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.
Fox Lake Rental Management Resources
Basics
Fundamental info regarding management services in Fox Lake.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a reliable renter in Fox Lake fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of prices of rental management in Fox Lake
Vetting
How Nesbitt Realty checks the backgrounds of renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you want know more about this area?
Our Guide to Real Estate is a helpful resource for everyone who wants to learn more about Fox Lake and neighboring areas. The Guide to Real Estate compiles facts about what has sold and what is on the market, and a few surprising facts that you may not know. And, our Guide has quite a few of the aspects of residing in Fox Lake. As a matter of course, most of this is interesting for purchasers and sellers, but rental investors and tenants will probably also find this information to be quite eye-opening.
Landlord Reference
a free reference for landlords in Fox Lake
- Before you move a tenant into your property in Fox Lake
- Collections and evictions
- Communications with the renter
- During the lease term
- 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 property management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Fox Lake property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Fox Lake
- 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 Fox Lake