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. 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 Riverton, 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 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 property owner.
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.
Riverton Rental Management Resources
Do you need know more about the community?
Our Guide to Real Estate is a free tool for everyone who wants to review important real estate information about Riverton and neighboring communities. The Guide to Real Estate compiles information about what has sold and what is on the market, as well as many surprising facts that you might not know. And, our Guide has some fundamentals of life in Riverton. As might be expected, all of this is interesting for buyers and sellers, but rental investors and renters will also find this information to be quite useful.
a free archive for property owners in Riverton
- Before you rent out your rental property in Riverton
- Collections and evictions
- Communications with the renter
- During tenancy
- End of tenancy 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 property management company handles utilities
- How Nesbitt finds tenants
- Insurance matters for owners using our property management
- How Nesbitt Realty & Management manage keys
- Riverton property owner responsibilities
- Maintenance, repairs & inspections for your property in Riverton
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental
- When owners don't yet know their new address
- Vetting tenants in Riverton