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. Above all, 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 Solid Woods, 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 real estate investors.
Contingency reserve is a special type of escrow.
A contingency reserve account is money that is held in savings 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.
Real estate investors 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.
Solid Woods Rental Management Resources
Basics
Elementary information about what management services in Solid Woods.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a dependable renter in Solid Woods fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of fees associated with rental management in Solid Woods
Vetting
How Nesbitt Realty vets renters for landlords.
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 tool for everyone who wants to learn more about Solid Woods and surrounding communities. The Guide to Real Estate has information regarding what has sold and what is on the market, and many compelling facts that you may not be aware of. And, our Guide has quite a few of the elements of life in Solid Woods. As might be expected, most of this is interesting for buyers and sellers, but property owners and renters will likely also find this information to be quite eye-opening.
Landlord Reference
a good archive for rental investors in Solid Woods
- Before you rent out your property in Solid Woods
- 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 landlord get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Realty & Management finds renters
- Insurance matters for landlords using our property management
- How Nesbitt Realty & Management manage keys
- Solid Woods owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Solid Woods
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When property owners don't yet know their new address
- Vetting tenants in Solid Woods