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 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 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 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 savings 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. 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.
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.
Northern Virginia Property Management Resources
Basics
Basic information regarding rental managment in Northern Virginia.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a reliable renter in Northern Virginia fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
An overview of fees associated with rental management in Northern Virginia
Vetting
How Nesbitt Realty checks the backgrounds of tenants for our clients.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rentals?
Clients
Who uses Nesbitt Realty management services?
Do you need know more about the area?
Our Guide to Real Estate is a handy resource for everyone who needs to find out more about Northern Virginia and surrounding areas. The Guide to Real Estate includes information about what has sold and what is currently listed, and many interesting facts that you might not know. And, our Guide features many of the fundamentals of life in Northern Virginia. As might be expected, most of this is interesting for purchasers and sellers, but landlords and renters will probably also find this data to be quite edifying.
Landlord Reference
a good archive for rental investors in Northern Virginia
- Before you rent out your property 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 property owner get paid?
- How your property manager handles the association and your community
- How your property manager handles utilities
- How Nesbitt Management finds renters
- Insurance matters for landlords using our rental management
- How Nesbitt Management handles keys
- Northern Virginia landlord 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
- When landlords don't yet know their new address
- Vetting renters in Northern Virginia