What is a contingency reserve account?

Do you know the difference between contingency reserves and operating funds?

Operating funds are funds that our real estate brokerage uses to pay for our business. Operating funds are our money.  Above all, 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 Cross Junction, 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 savings 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. When 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.

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.

 

Cross Junction Rental Management Resources

Basics

Elementary information about what property management in Cross Junction.

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Getting Started

Learn more about getting started with rental property management

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Find A Tenant

Market your property to rent to find a great renter in Cross Junction fast.

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Accounting

How does Nesbitt Realty keep track of income and expenses for landlords?

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Cost

A breakdown of fees associated with rental management services in Cross Junction

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Vetting

How Nesbitt Realty checks the backgrounds of renters for landlords.

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Reserves

What is a contingency reserve account?

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Territory

Where does Nesbitt Realty manage rentals?

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Clients

Who uses Nesbitt Realty management services?

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Contact

Call (703)765-0300 to speak to a rental specialist now.

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Should you know more about the area?

Our Guide to Real Estate is a handy resource for anyone who wants to investigate real estate facts about Cross Junction and neighboring areas.  The Guide to Real Estate compiles information regarding what has sold and what is for sale, as well as a few surprising facts that you might not be aware of.  Not to mention, our Guide spotlights many of the aspects of residing in Cross Junction.  Yes, all of this is helpful for purchasers and sellers, but rental investors and tenants might also find these resources to be very edifying.

Do you need advice about rental property management?

Talk to one of our experts about rental property in Virginia.