Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage uses to fund our business. Operating funds are our money. On the other hand, 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 Fairway Manor Estates, 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 maintenance and other incidentals that occur during rental 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 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.
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.
Fairway Manor Estates Property Management Resources
Should you know more about our area?
Nesbitt Realty's Guide to Real Estate is a helpful tool for anyone who needs to find out more about Fairway Manor Estates and nearby areas. The Guide to Real Estate has facts regarding what has sold and what is currently listed, and many shocking facts that you may not be aware of. In addition, our Guide highlights some aspects of living in Fairway Manor Estates. Of course, most of this is interesting for buyers and sellers, but real estate investors and renters should also find the facts to be somewhat edifying.
a free source for rental investors in Fairway Manor Estates
- Before you lease out your rental property in Fairway Manor Estates
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your rental manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Fairway Manor Estates property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Fairway Manor Estates
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting tenants in Fairway Manor Estates