Do you know the difference between contingency reserves and operating funds?
Operating funds are funds 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 Springfield, 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 property owner. 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.
Landlords 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.
Springfield Rental Management Resources
Basics
Elementary info regarding management services in Springfield.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a great renter in Springfield fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A breakdown of fees associated with property management services in Springfield
Vetting
How Nesbitt Realty vets renters for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Do you need know more about the local real estate market?
Nesbitt Realty's Guide to Real Estate is a handy resource for anyone who hopes to learn more about Springfield and neighboring communities. The Guide to Real Estate has facts about what has sold and what is on the market, and a few interesting facts that you may not know. Furthermore, our Guide features quite a few of the assets of life in Springfield. Definitely, all of this is helpful for purchasers and sellers, but property owners and renters should also find these tools to be somewhat sobering.
Landlord Reference
a handy reference for landlords in Springfield
- Before you lease out your rental in Springfield
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the property 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 property management
- How Nesbitt Realty & Management manage keys
- Springfield landlord responsibilities
- Maintenance, repairs & inspections for your rental property in Springfield
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting renters in Springfield