Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our property management and real estate business uses to pay for 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 Amissville, 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 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 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.
Amissville Rental Management Resources
Do you want know more about our local real estate market?
Nesbitt Realty's Guide to Real Estate is a handy tool for everyone who wants to find out more about Amissville and nearby areas. The Guide to Real Estate has information about what has sold and what is for sale, as well as a couple of interesting facts that you may not be aware of. Not to mention, our Guide has many of the assets of residing in Amissville. Of course, most of this is helpful for buyers and sellers, but real estate investors and tenants will likely also find this data to be somewhat sobering.
a handy archive for property owners in Amissville
- Before you move a tenant into your rental in Amissville
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of lease term and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your property manager handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Amissville rental investor responsibilities
- Maintenance, repairs & inspections for your rental property in Amissville
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When landlords don't yet know their new address
- Vetting renters in Amissville