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. But even so, 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 Flint Hill, 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 real estate investors.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in savings to pay for maintenance 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 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.
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.
Flint Hill Rental Management Resources
Do you want understand more about the local real estate market?
Our Guide to Real Estate is a handy tool for anyone who hopes to review important real estate information about Flint Hill and nearby communities. The Guide to Real Estate has data regarding what has sold and what is on the market, and a couple of compelling facts that you may not be aware of. Also, our Guide spotlights quite a few of the elements of residing in Flint Hill. As might be expected, most of this is interesting for buyers and sellers, but landlords and renters will probably also find these tools to be very sobering.
a good source for rental investors in Flint Hill
- Before you put a renter in your investment in Flint Hill
- Collections and evictions
- Communications with the renter
- During the lease term
- 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 finds tenants
- Insurance matters for landlords using our property management
- How Nesbitt Realty & Management manage keys
- Flint Hill landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Flint Hill
- 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 Flint Hill