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 Springfield, 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 escrow 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 landlord. 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.
Springfield Property Management Resources
Basics
Basic information regarding rental managment in Springfield.
Getting Started
Learn more about getting started with property management
Find A Tenant
List your property to rent to find a reliable renter in Springfield fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
A breakdown of prices of property management services in Springfield
Vetting
How Nesbitt Realty vets tenants for property owners.
Reserves
What is a contingency reserve account?
Territory
Where does Nesbitt Realty manage rental property?
Clients
Who uses Nesbitt Realty management services?
Do you need understand more about the community?
Nesbitt Realty's Guide to Real Estate is a handy tool for anyone who needs to investigate real estate facts about Springfield and nearby areas. The Guide to Real Estate has facts regarding what has sold and what is for sale, as well as a few compelling facts that you may not be aware of. Furthermore, our Guide highlights many of the fundamentals of residing in Springfield. As might be expected, most of this is helpful for purchasers and sellers, but real estate investors and tenants will likely also find the facts to be somewhat informative.
Landlord Reference
a useful reference for rental investors in Springfield
- Before you rent out your rental property in Springfield
- Collections and evictions
- Communications with the renter
- During tenancy
- End of lease term 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 property manager handles utilities
- How Nesbitt Management finds tenants
- Insurance matters for property owners using our property management
- How Nesbitt Management handles keys
- Springfield rental investor responsibilities
- Maintenance, repairs & inspections for your rental investment in Springfield
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When landlords don't yet know their new address
- Vetting tenants in Springfield