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. In contrast, 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 Stephenson, 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 real estate investor. When 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.
Stephenson Rental Management Resources
Basics
Basic information about what management services in Stephenson.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a reliable tenant in Stephenson fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of prices of property management services in Stephenson
Vetting
How Nesbitt Realty vets renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Should you know more about our area?
Nesbitt Realty's Guide to Real Estate is a free resource for anyone who needs to review important real estate information about Stephenson and surrounding communities. The Guide to Real Estate provides facts about what has sold and what is currently listed, and a couple of surprising facts that you may not be aware of. Furthermore, our Guide features quite a few of the elements of residing in Stephenson. As a matter of course, all of this is interesting for buyers and sellers, but real estate investors and renters will also find the facts to be very useful.
Landlord Reference
a handy source for property owners in Stephenson
- Before you put a renter in your investment in Stephenson
- Collections and evictions
- Communications with the renter
- During tenancy
- End of lease term and what happens when a tenant breaks the lease
- How does the owner 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 rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Stephenson landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Stephenson
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When owners don't yet know their new address
- Vetting tenants in Stephenson