Do you know the difference between contingency reserves and operating funds?
Operating funds are monies that our real estate brokerage uses to fund our business. Operating funds are our money. However, 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 Fairfax, 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 landlord clients.
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 rental 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 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.
Fairfax Rental Management Resources
Basics
Basic information about what rental managment in Fairfax.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a great tenant in Fairfax fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of prices of rental management in Fairfax
Vetting
How Nesbitt Realty checks the backgrounds of renters for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage property?
Clients
Who uses Nesbitt Realty management services?
Do you need know more about our local real estate market?
Our Guide to Real Estate is a free resource for anyone who wants to learn more about Fairfax and surrounding areas. The Guide to Real Estate includes data about what has sold and what is on the market, as well as a few interesting facts that you might not be aware of. In addition, our Guide has quite a few of the benefits of life in Fairfax. Of course, most of this is useful for buyers and sellers, but landlords and tenants might also find the facts to be somewhat sobering.
Landlord Reference
a free archive for property owners in Fairfax
- Before you move a tenant into your property in Fairfax
- 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 rental investors using our property management
- How Nesbitt Management handles keys
- Fairfax landlord responsibilities
- Maintenance, repairs & inspections for your rental investment in Fairfax
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When property owners don't yet know their new address
- Vetting renters in Fairfax