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 Forest Edge, 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 landlord clients.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in escrow 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.
Forest Edge Property Management Resources
Should you understand more about this community?
Nesbitt Realty's Guide to Real Estate is a handy tool for anyone who hopes to review important real estate information about Forest Edge and neighboring communities. The Guide to Real Estate includes facts regarding what has sold and what is currently listed, as well as a couple of surprising facts that you may not be aware of. Furthermore, our Guide has many of the assets of living in Forest Edge. Yes, all of this is helpful for buyers and sellers, but owners and renters should also find these tools to be quite enlightening.
a free source for property owners in Forest Edge
- Before you rent out your property in Forest Edge
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the owner get paid?
- How your property management company handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Forest Edge landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Forest Edge
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting tenants in Forest Edge