Do you know the difference between contingency reserves and operating funds?
Operating funds are funds that our property management and real estate business uses to fund our business. Operating funds are our money. Conversely, 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 Falls Church, 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 escrow 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.
Falls Church Property Management Resources
Basics
Basic info regarding management services in Falls Church.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
List your property to rent to find a reliable tenant in Falls Church fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for landlords?
Cost
A list of fees associated with property management services in Falls Church
Vetting
How Nesbitt Realty checks the backgrounds of renters 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 want understand more about our area?
Nesbitt Realty's Guide to Real Estate is a free resource for everyone who needs to investigate real estate facts about Falls Church and nearby areas. The Guide to Real Estate has data regarding what has sold and what is on the market, and a couple of compelling facts that you might not be aware of. Also, our Guide has quite a few of the fundamentals of life in Falls Church. As a matter of course, all of this is helpful for purchasers and sellers, but property owners and tenants will likely also find this data to be very informative.
Landlord Reference
a useful reference for rental investors in Falls Church
- Before you rent out your rental in Falls Church
- Collections and evictions
- Communications with the tenant
- During the lease term
- 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 property manager handles utilities
- How we find renters
- Insurance matters for owners using our rental management
- How Nesbitt Management handles keys
- Falls Church property owner responsibilities
- Maintenance, repairs & inspections for your rental investment in Falls Church
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental investment
- When owners don't yet know their new address
- Vetting tenants in Falls Church