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. In contrast, 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 Penn Laird, 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 savings to pay for maintenance and other incidentals that occur during property management. Although the money is in our escrow account, the money belongs to the landlord. 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.
Penn Laird Property Management Resources
Basics
Basic information regarding property management in Penn Laird.
Getting Started
Learn more about getting started with property management
Find A Tenant
Market your property to rent to find a reliable tenant in Penn Laird fast.
Accounting
How does Nesbitt Realty keep track of income and expenses for property owners?
Cost
An overview of prices of property management services in Penn Laird
Vetting
How Nesbitt Realty vets 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?
Should you understand more about this local real estate market?
Our Guide to Real Estate is a helpful resource for everyone who needs to investigate real estate facts about Penn Laird and nearby areas. The Guide to Real Estate includes information about what has sold and what is on the market, as well as many compelling facts that you may not know. Not to mention, our Guide has many of the benefits of residing in Penn Laird. As a matter of course, all of this is interesting for purchasers and sellers, but landlords and tenants may also find the facts to be quite edifying.
Landlord Reference
a handy archive for rental investors in Penn Laird
- Before you lease out your rental in Penn Laird
- 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 landlord get paid?
- How your rental manager handles the association and your community
- How your property management company handles utilities
- How Nesbitt Management finds renters
- Insurance matters for rental investors using our rental management
- How Nesbitt Management handles keys
- Penn Laird owner responsibilities
- Maintenance, repairs & inspections for your property in Penn Laird
- The move-in inspection
- Property management information form
- Selling a 1031 tax exchange & more
- Starting our management of your rental property
- When landlords don't yet know their new address
- Vetting tenants in Penn Laird