Definition
Funds set aside periodically to pay for future capital replacements.
Example
Lenders often require a replacement reserve escrow of $250 to $300 per unit per year.
Related terms
Frequently asked questions
What does Replacement Reserve mean in real estate?
Funds set aside periodically to pay for future capital replacements.
How is Replacement Reserve used in practice?
Lenders often require a replacement reserve escrow of $250 to $300 per unit per year.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.