What is a contingency reserve account?

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.  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 Castleton, 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 rental management. Although the money is in our escrow account, the money belongs to the landlord. When 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.

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.

 

Castleton Rental Management Resources

Basics

Basic information about what management services in Castleton.

Learn More

Getting Started

Learn more about getting started with rental property management

Learn More

Find A Tenant

Market your property to rent to find a dependable tenant in Castleton fast.

Learn More

Accounting

How does Nesbitt Realty keep track of income and expenses for property owners?

Learn More

Cost

An overview of prices of rental management in Castleton

Learn More

Vetting

How Nesbitt Realty vets renters for landlords.

Learn More

Reserves

What is a contingency reserve account?

Learn More

Territory

Where does Nesbitt Realty manage rental investments?

Learn More

Clients

Who uses Nesbitt Realty management services?

Learn More

Contact

Call (703)765-0300 to speak to a rental specialist now.

Email

Do you need understand more about this local real estate market?

Nesbitt Realty's Guide to Real Estate is a helpful resource for everyone who wants to find out more about Castleton and neighboring communities.  The Guide to Real Estate has facts regarding what has sold and what is on the market, as well as a couple of interesting facts that you might not be aware of.  And, our Guide features some fundamentals of residing in Castleton.  As might be expected, most of this is useful for buyers and sellers, but landlords and tenants should also find the facts to be somewhat useful.

Do you need advice about rental property management?

Talk to one of our experts about rental property in Virginia.