Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to pay for our business. Operating funds are our money. Still, 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 Linden, 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 landlord clients.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in escrow to pay for maintenance and other incidentals that occur during rental 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.
Linden Rental Management Resources
Basics
Fundamental info about what property management in Linden.
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 Linden 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 Linden
Vetting
How Nesbitt Realty checks the backgrounds of renters for property owners.
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 our area?
Our Guide to Real Estate is a helpful resource for anyone who needs to find out more about Linden and surrounding communities. The Guide to Real Estate compiles information regarding what has sold and what is on the market, as well as a few interesting facts that you may not know. And, our Guide features quite a few of the elements of life in Linden. Certainly, most of this is useful for purchasers and sellers, but property owners and renters will probably also find these resources to be very informative.
Landlord Reference
a handy source for rental investors in Linden
- Before you put a renter in your rental in Linden
- Collections and evictions
- Communications with the renter
- During tenancy
- End of lease term and what happens when a renter breaks the lease
- How does the landlord get paid?
- How your property manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for landlords using our rental management
- How Nesbitt Realty & Management manage keys
- Linden property owner responsibilities
- Maintenance, repairs & inspections for your property in Linden
- 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 tenants in Linden