Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our real estate brokerage uses to pay for our business. Operating funds are our money. But, 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 Warren 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 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 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 property owner. 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.
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.
Warren County Rental Management Resources
Basics
Basic information regarding rental managment in Warren County.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a great renter in Warren County 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 Warren County
Vetting
How Nesbitt Realty vets renters for landlords.
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 this area?
Our Guide to Real Estate is a helpful tool for anyone who hopes to investigate real estate facts about Warren County and neighboring communities. The Guide to Real Estate includes data about what has sold and what is for sale, as well as a few shocking facts that you might not be aware of. In addition, our Guide has quite a few of the elements of living in Warren County. As might be expected, all of this is useful for buyers and sellers, but property owners and tenants will probably also find the facts to be quite eye-opening.
Landlord Reference
a useful reference for property owners in Warren County
- Before you rent out your investment in Warren County
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy 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 manager handles utilities
- How Nesbitt finds tenants
- Insurance matters for landlords using our property management
- How Nesbitt Realty & Management manage keys
- Warren County property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Warren County
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When property owners don't yet know their new address
- Vetting tenants in Warren County