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. 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 Davis Strasburg, 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 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.
Property 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.
Davis Strasburg Property Management Resources
Basics
Fundamental info regarding management services in Davis Strasburg.
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 Davis Strasburg fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of fees associated with rental management services in Davis Strasburg
Vetting
How Nesbitt Realty checks the backgrounds of tenants for landlords.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage property?
Clients
Who uses Nesbitt Realty management services?
Do you want understand more about this area?
Our Guide to Real Estate is a helpful tool for everyone who needs to review important real estate information about Davis Strasburg and nearby communities. The Guide to Real Estate provides information about what has sold and what is currently listed, as well as a few compelling facts that you may not be aware of. In addition, our Guide has quite a few of the fundamentals of residing in Davis Strasburg. Of course, all of this is interesting for purchasers and sellers, but real estate investors and renters should also find these resources to be somewhat useful.
Landlord Reference
a good archive for landlords in Davis Strasburg
- Before you put a renter in your rental property in Davis Strasburg
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a renter breaks the lease
- How does the landlord get paid?
- How your property management company handles the association and your community
- How your property manager handles utilities
- How Nesbitt finds tenants
- Insurance matters for property owners using our property management
- How Nesbitt Realty & Management manage keys
- Davis Strasburg rental investor responsibilities
- Maintenance, repairs & inspections for your rental property in Davis Strasburg
- 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 tenants in Davis Strasburg