Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our property management and real estate business uses to pay for 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 Downtown, 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 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 property 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.
Property 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.
Downtown Rental Management Resources
Basics
Basic info regarding management services in Downtown.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a reliable tenant in Downtown fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of fees associated with rental management services in Downtown
Vetting
How Nesbitt Realty vets renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Should you know more about the area?
Our Guide to Real Estate is a helpful tool for everyone who wants to learn more about Downtown and surrounding communities. The Guide to Real Estate provides facts about what has sold and what is currently listed, and many interesting facts that you might not be aware of. In addition, our Guide has quite a few of the benefits of residing in Downtown. Naturally, all of this is useful for purchasers and sellers, but owners and renters might also find this data to be very edifying.
Landlord Reference
a free archive for property owners in Downtown
- Before you move a tenant into your rental property in Downtown
- Collections and evictions
- Communications with the renter
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Downtown landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Downtown
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting tenants in Downtown