Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our property management and real estate business 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 Woodville, 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 purchasers (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 real estate investor. 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.
Landlords 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.
Woodville Rental Management Resources
Should you know more about our community?
Nesbitt Realty's Guide to Real Estate is a free tool for everyone who hopes to find out more about Woodville and nearby communities. The Guide to Real Estate provides information about what has sold and what is on the market, as well as a couple of surprising facts that you may not know. Also, our Guide has many of the elements of residing in Woodville. Certainly, most of this is helpful for purchasers and sellers, but owners and tenants will likely also find this information to be very enlightening.
a useful archive for property owners in Woodville
- Before you put a renter in your rental property in Woodville
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the owner get paid?
- How your rental manager handles the association and your community
- How your rental manager handles utilities
- How Nesbitt finds renters
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- Woodville landlord responsibilities
- Maintenance, repairs & inspections for your property in Woodville
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting renters in Woodville