Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to fund 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 Shenandoah County, 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 savings to pay for maintenance and other incidentals that occur during property 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.
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.
Shenandoah County Rental Management Resources
Basics
Elementary information about what property management in Shenandoah County.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a dependable renter in Shenandoah County fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A breakdown of prices of property management services in Shenandoah County
Vetting
How Nesbitt Realty vets tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Should you understand more about our community?
Our Guide to Real Estate is a free resource for everyone who hopes to find out more about Shenandoah County and neighboring communities. The Guide to Real Estate has data regarding what has sold and what is on the market, and many compelling facts that you may not know. Furthermore, our Guide has quite a few of the benefits of living in Shenandoah County. As might be expected, all of this is useful for purchasers and sellers, but owners and renters will likely also find this data to be somewhat sobering.
Landlord Reference
a free archive for property owners in Shenandoah County
- Before you put a renter in your investment in Shenandoah County
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your property management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Shenandoah County property owner responsibilities
- Maintenance, repairs & inspections for your rental property in Shenandoah County
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting tenants in Shenandoah County