Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage uses to fund our business. Operating funds are our money. Still, 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 Cedar Crest Estates, 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 escrow to pay for repairs 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.
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.
Cedar Crest Estates Rental Management Resources
Basics
Fundamental information regarding property management in Cedar Crest Estates.
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 Cedar Crest Estates fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of fees associated with rental management services in Cedar Crest Estates
Vetting
How Nesbitt Realty vets renters for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about this area?
Our Guide to Real Estate is a handy tool for everyone who needs to investigate real estate facts about Cedar Crest Estates and surrounding communities. The Guide to Real Estate provides facts about what has sold and what is on the market, and a couple of shocking facts that you may not be aware of. In addition, our Guide features some elements of life in Cedar Crest Estates. Of course, most of this is useful for purchasers and sellers, but owners and renters will probably also find these resources to be quite useful.
Landlord Reference
a free source for rental investors in Cedar Crest Estates
- Before you move a tenant into your rental in Cedar Crest Estates
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the landlord get paid?
- How your management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Cedar Crest Estates landlord responsibilities
- Maintenance, repairs & inspections for your property in Cedar Crest Estates
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When property owners don't yet know their new address
- Vetting tenants in Cedar Crest Estates