Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to fund our business. Operating funds are our money. Above all, 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 Boston, 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 property owners.
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 property owner. If the property management ends, that money is promptly returned to the real estate investor.
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.
Owners 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.
Boston Property Management Resources
Basics
Fundamental information regarding property management in Boston.
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 Boston fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
An overview of prices of property management services in Boston
Vetting
How Nesbitt Realty checks the backgrounds of renters for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about our area?
Nesbitt Realty's Guide to Real Estate is a helpful resource for everyone who needs to review important real estate information about Boston and neighboring areas. The Guide to Real Estate provides information about what has sold and what is currently listed, and a couple of shocking facts that you might not be aware of. Not to mention, our Guide spotlights some fundamentals of residing in Boston. Yes, most of this is interesting for buyers and sellers, but property owners and renters will also find these resources to be somewhat sobering.
Landlord Reference
a good archive for rental investors in Boston
- Before you lease out your rental property in Boston
- 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 landlord get paid?
- How your rental manager handles the association and your community
- How your management company handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Boston landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Boston
- 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 tenants in Boston