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. 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 Browntown, 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 escrow to pay for repairs and other incidentals that occur during rental 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.
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.
Browntown Property Management Resources
Basics
Elementary info about what rental managment in Browntown.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a reliable tenant in Browntown fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A list of fees associated with rental management in Browntown
Vetting
How Nesbitt Realty vets renters for our clients.
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 understand more about our area?
Our Guide to Real Estate is a free resource for everyone who wants to find out more about Browntown and surrounding areas. The Guide to Real Estate provides facts about what has sold and what is for sale, as well as a couple of shocking facts that you might not be aware of. Not to mention, our Guide has some benefits of residing in Browntown. Of course, all of this is helpful for buyers and sellers, but rental investors and tenants may also find this information to be very edifying.
Landlord Reference
a useful source for landlords in Browntown
- Before you move a tenant into your investment in Browntown
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of tenancy and what happens when a renter breaks the lease
- How does the property owner get paid?
- How your management company handles the association and your community
- How your property management company handles utilities
- How Nesbitt Realty & Management finds tenants
- Insurance matters for property owners using our rental management
- How Nesbitt Realty & Management manage keys
- Browntown owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Browntown
- 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 Browntown