Do you know the difference between contingency reserves and operating funds?
Operating funds are funds 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 Sovereign Village, 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 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 maintenance and other incidentals that occur during property management. Although the money is in our escrow account, the money belongs to the landlord. If 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.
Sovereign Village Rental Management Resources
Basics
Fundamental info regarding property management in Sovereign Village.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a great renter in Sovereign Village fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of fees associated with rental management services in Sovereign Village
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?
Should you know more about our community?
Our Guide to Real Estate is a handy resource for everyone who hopes to find out more about Sovereign Village and nearby communities. The Guide to Real Estate has data about what has sold and what is on the market, and a few compelling facts that you may not know. Furthermore, our Guide features quite a few of the fundamentals of life in Sovereign Village. Of course, all of this is useful for buyers and sellers, but landlords and tenants will also find this data to be very useful.
Landlord Reference
a free reference for property owners in Sovereign Village
- Before you move a tenant into your rental in Sovereign Village
- Collections and evictions
- Communications with the renter
- During the lease term
- End of lease term and what happens when a tenant breaks the lease
- How does the rental investor 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 owners using our rental management
- How Nesbitt Realty & Management manage keys
- Sovereign Village landlord responsibilities
- Maintenance, repairs & inspections for your property in Sovereign Village
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When owners don't yet know their new address
- Vetting renters in Sovereign Village