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. But, 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 Page County, 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 purchasers (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 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 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.
Real estate investors 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.
Page County Rental Management Resources
Do you want know more about the area?
Our Guide to Real Estate is a handy resource for anyone who wants to find out more about Page County and neighboring communities. The Guide to Real Estate provides facts regarding what has sold and what is currently listed, and many interesting facts that you may not know. Furthermore, our Guide highlights some benefits of living in Page County. Of course, most of this is helpful for buyers and sellers, but property owners and tenants may also find these tools to be quite sobering.
a handy reference for landlords in Page County
- Before you rent out your rental in Page County
- Collections and evictions
- Communications with the renter
- During the lease term
- End of tenancy and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Page County landlord responsibilities
- Maintenance, repairs & inspections for your property in Page County
- 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 renters in Page County