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 pay for 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 landlord clients.
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 real estate investor. 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.
Falls Church Property Management Resources
Basics
Fundamental info regarding rental managment in Falls Church.
Getting Started
Learn more about getting started with rental property management
Find A Tenant
Market your property to rent to find a great renter in Falls Church fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for real estate investors?
Cost
An overview of prices of rental management services in Falls Church
Vetting
How Nesbitt Realty vets 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?
Should you know more about the area?
Our Guide to Real Estate is a handy resource for anyone who wants to find out more about Falls Church and nearby areas. The Guide to Real Estate compiles information about what has sold and what is currently listed, as well as some surprising facts that you might not know. In addition, our Guide spotlights quite a few of the assets of living in Falls Church. Of course, most of this is interesting for buyers and sellers, but real estate investors and renters will probably also find this data to be quite useful.
Landlord Reference
a handy archive for landlords in Falls Church
- Before you lease out your investment in Falls Church
- Collections and evictions
- Communications with the tenant
- During tenancy
- End of tenancy and what happens when a tenant breaks the lease
- How does the landlord get paid?
- How your management company handles the association and your community
- How your rental manager handles utilities
- How we find renters
- Insurance matters for property owners using our rental management
- How Nesbitt Management handles keys
- Falls Church landlord responsibilities
- Maintenance, repairs & inspections for your rental property in Falls Church
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When owners don't yet know their new address
- Vetting renters in Falls Church