Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage uses to pay for our business. Operating funds are our money. On the other hand, 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 landlord clients.
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. 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.
Castleton Property Management Resources
Do you need understand more about our community?
Nesbitt Realty's Guide to Real Estate is a helpful tool for anyone who wants to investigate real estate facts about Castleton and nearby communities. The Guide to Real Estate provides data regarding what has sold and what is on the market, and many shocking facts that you may not be aware of. And, our Guide spotlights many of the benefits of life in Castleton. As a matter of course, all of this is useful for purchasers and sellers, but owners and tenants should also find this data to be quite informative.
a useful source for rental investors in Castleton
- Before you lease out your rental property in Castleton
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the rental investor get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Realty & Management manage keys
- Castleton property owner responsibilities
- Maintenance, repairs & inspections for your property in Castleton
- 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 Castleton