Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to pay for 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 Gainesville, 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 property management. Although the money is in our escrow account, the money belongs to the property owner. When 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.
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.
Gainesville Rental Management Resources
Basics
Basic info about what property management in Gainesville.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a great renter in Gainesville fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of prices of rental management in Gainesville
Vetting
How Nesbitt Realty checks the backgrounds of 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?
Do you want understand more about this local real estate market?
Nesbitt Realty's Guide to Real Estate is a free resource for everyone who wants to find out more about Gainesville and surrounding areas. The Guide to Real Estate includes facts regarding what has sold and what is on the market, and some surprising facts that you might not be aware of. Also, our Guide has many of the assets of residing in Gainesville. Of course, all of this is interesting for buyers and sellers, but owners and tenants might also find this data to be somewhat useful.
Landlord Reference
a useful source for rental investors in Gainesville
- Before you put a renter in your property in Gainesville
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your management company handles the association and your community
- How your management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- Gainesville property owner responsibilities
- Maintenance, repairs & inspections for your rental property in Gainesville
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When property owners don't yet know their new address
- Vetting tenants in Gainesville