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 fund our business. Operating funds are our money. Conversely, 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 New Haven, 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. 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.
Landlords 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.
New Haven Rental Management Resources
Basics
Basic info regarding rental managment in New Haven.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a reliable renter in New Haven fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
An overview of prices of rental management services in New Haven
Vetting
How Nesbitt Realty vets renters for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage property?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about the community?
Nesbitt Realty's Guide to Real Estate is a free tool for everyone who wants to review important real estate information about New Haven and surrounding communities. The Guide to Real Estate has information regarding what has sold and what is currently listed, and a couple of compelling facts that you might not know. Also, our Guide highlights some assets of living in New Haven. As a matter of course, most of this is useful for purchasers and sellers, but owners and renters may also find this information to be very edifying.
Landlord Reference
a useful source for rental investors in New Haven
- Before you move a tenant into your rental property in New Haven
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your property management company handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for property owners using our rental management
- How Nesbitt Realty & Management manage keys
- New Haven owner responsibilities
- Maintenance, repairs & inspections for your rental investment in New Haven
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting renters in New Haven