Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our property management and real estate business uses to fund our business. Operating funds are our money. But even so, 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 Shenandoah, 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. If 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.
Shenandoah Rental Management Resources
Basics
Elementary info regarding property management in Shenandoah.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a reliable tenant in Shenandoah fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
A breakdown of fees associated with rental management in Shenandoah
Vetting
How Nesbitt Realty checks the backgrounds of tenants for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you want understand more about this local real estate market?
Our Guide to Real Estate is a handy resource for everyone who hopes to learn more about Shenandoah and surrounding areas. The Guide to Real Estate provides information regarding what has sold and what is on the market, as well as many interesting facts that you might not know. And, our Guide spotlights quite a few of the assets of living in Shenandoah. Of course, most of this is useful for buyers and sellers, but property owners and tenants may also find this data to be somewhat informative.
Landlord Reference
a good source for rental investors in Shenandoah
- Before you rent out your investment in Shenandoah
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your rental manager handles the association and your community
- How your rental manager handles utilities
- How Nesbitt finds renters
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Shenandoah owner responsibilities
- Maintenance, repairs & inspections for your property in Shenandoah
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting tenants in Shenandoah