May 31 , 2016

Tampa School of Real Estate

Replacement Reserves

Definition:   a portion of annual income set aside for covering the cost of major components (e.g. air conditioning) that wear out faster than the building itself

Pronunciation:  \ri-ˈplās-mənt\\ri-ˈzərv\

Used in a Sentence:   When the air conditioning unit needed to be replaced we used the funds from our replacement reserves to pay for it.