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. 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 buyers (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 savings to pay for repairs and other incidentals that occur during property 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.
Property 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.
Springfield Property Management Resources
Basics
Basic information about what management services in Springfield.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a reliable renter in Springfield fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A breakdown of fees associated with property management services in Springfield
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 know more about our area?
Nesbitt Realty's Guide to Real Estate is a handy resource for everyone who hopes to learn more about Springfield and nearby areas. The Guide to Real Estate has data regarding what has sold and what is currently listed, as well as some surprising facts that you might not be aware of. And, our Guide spotlights many of the fundamentals of residing in Springfield. Definitely, most of this is useful for purchasers and sellers, but rental investors and renters might also find these resources to be quite edifying.
Landlord Reference
a good reference for rental investors in Springfield
- Before you put a renter in your property in Springfield
- Collections and evictions
- Communications with the tenant
- During the lease term
- End of lease term and what happens when a renter breaks the lease
- How does the rental investor get paid?
- How your property manager handles the association and your community
- How your rental manager handles utilities
- How Nesbitt Management finds renters
- Insurance matters for owners using our rental management
- How Nesbitt Management handles keys
- Springfield owner responsibilities
- Maintenance, repairs & inspections for your property in Springfield
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your property
- When owners don't yet know their new address
- Vetting renters in Springfield