Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our property management and real estate business uses to fund our business. Operating funds are our money. However, 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 Bentonville, 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 maintenance 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 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.
Bentonville Property Management Resources
Basics
Elementary information regarding property management in Bentonville.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a great tenant in Bentonville fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of prices of rental management services in Bentonville
Vetting
How Nesbitt Realty checks the backgrounds of tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental investments?
Clients
Who uses Nesbitt Realty management services?
Do you want know more about the area?
Nesbitt Realty's Guide to Real Estate is a handy resource for everyone who needs to review important real estate information about Bentonville and nearby areas. The Guide to Real Estate compiles information about what has sold and what is for sale, as well as some interesting facts that you might not be aware of. In addition, our Guide highlights some assets of residing in Bentonville. Of course, most of this is useful for purchasers and sellers, but real estate investors and renters may also find these tools to be quite informative.
Landlord Reference
a handy source for landlords in Bentonville
- Before you put a renter in your rental property in Bentonville
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the property owner get paid?
- How your property manager handles the association and your community
- How your management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Bentonville landlord responsibilities
- Maintenance, repairs & inspections for your property in Bentonville
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When property owners don't yet know their new address
- Vetting tenants in Bentonville