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. 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 Wilton House, 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 property owners.
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 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 property owner.
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.
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.
Wilton House Property Management Resources
Do you want know more about our local real estate market?
Our Guide to Real Estate is a helpful tool for anyone who needs to learn more about Wilton House and neighboring communities. The Guide to Real Estate compiles information about what has sold and what is on the market, and a few surprising facts that you may not know. In addition, our Guide features quite a few of the fundamentals of living in Wilton House. As might be expected, most of this is useful for purchasers and sellers, but landlords and tenants will also find this information to be very sobering.
a useful reference for rental investors in Wilton House
- Before you move a tenant into your property in Wilton House
- 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 landlord get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for property owners using our rental management
- How Nesbitt Realty & Management manage keys
- Wilton House owner responsibilities
- Maintenance, repairs & inspections for your property in Wilton House
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When property owners don't yet know their new address
- Vetting tenants in Wilton House