Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage uses to fund our business. Operating funds are our money. Conversely, 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 Crossroads Farm, 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 landlord clients.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in savings 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 property owner.
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.
Crossroads Farm Property Management Resources
Basics
Elementary information about what management services in Crossroads Farm.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a reliable renter in Crossroads Farm fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A breakdown of fees associated with property management services in Crossroads Farm
Vetting
How Nesbitt Realty vets tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you want understand more about our local real estate market?
Our Guide to Real Estate is a free resource for everyone who hopes to learn more about Crossroads Farm and neighboring communities. The Guide to Real Estate has data regarding what has sold and what is on the market, as well as a couple of surprising facts that you might not be aware of. Also, our Guide features many of the assets of residing in Crossroads Farm. Of course, all of this is helpful for purchasers and sellers, but landlords and renters might also find these resources to be very eye-opening.
Landlord Reference
a good reference for landlords in Crossroads Farm
- Before you move a tenant into your property in Crossroads Farm
- 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 rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty finds renters
- Insurance matters for rental investors using our property management
- How Nesbitt Realty & Management manage keys
- Crossroads Farm rental investor responsibilities
- Maintenance, repairs & inspections for your rental property in Crossroads Farm
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When owners don't yet know their new address
- Vetting renters in Crossroads Farm