Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to fund our business. Operating funds are our money. Nevertheless, 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 Manassas, 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 rental management. Although the money is in our escrow account, the money belongs to the landlord. When the property management ends, that money is promptly returned to the real estate investor.
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.
Manassas Property Management Resources
Do you need know more about the community?
Our Guide to Real Estate is a handy tool for everyone who hopes to investigate real estate facts about Manassas and surrounding communities. The Guide to Real Estate provides facts about what has sold and what is for sale, as well as some interesting facts that you might not be aware of. Also, our Guide features some benefits of life in Manassas. As a matter of course, all of this is helpful for buyers and sellers, but owners and renters might also find this data to be very informative.
a free source for rental investors in Manassas
- Before you move a tenant into your property in Manassas
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the landlord get paid?
- How your property manager handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for rental investors using our rental management
- How Nesbitt Realty & Management manage keys
- Manassas landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Manassas
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting tenants in Manassas