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. 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 Northern Virginia, 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 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 property management. Although the money is in our escrow account, the money belongs to the real estate investor. If 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.
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.
Northern Virginia Property Management Resources
Basics
Fundamental info regarding rental managment in Northern Virginia.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a dependable tenant in Northern Virginia fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A list of prices of property management services in Northern Virginia
Vetting
How Nesbitt Realty checks the backgrounds of tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you need understand more about this local real estate market?
Nesbitt Realty's Guide to Real Estate is a free resource for everyone who hopes to investigate real estate facts about Northern Virginia and surrounding areas. The Guide to Real Estate compiles data about what has sold and what is for sale, and some shocking facts that you might not be aware of. Furthermore, our Guide highlights quite a few of the benefits of life in Northern Virginia. Yes, most of this is useful for buyers and sellers, but owners and tenants will likely also find these resources to be somewhat edifying.
Landlord Reference
a good source for property owners in Northern Virginia
- Before you move a tenant into your rental in Northern Virginia
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the owner get paid?
- How your management company handles the association and your community
- How your management company handles utilities
- How Nesbitt Management finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Management handles keys
- Northern Virginia owner responsibilities
- Maintenance, repairs & inspections for your rental property in Northern Virginia
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When landlords don't yet know their new address
- Vetting tenants in Northern Virginia