Property Management
What is 'capital expenditure reserve' (CapEx reserve) in Idaho property management?
AThe down payment reserve required for purchase
BFunds set aside regularly to cover future major repairs and replacements (roof, HVAC, parking lot) that are too large for the operating budget✓ Correct
CThe lender's reserve requirement for escrow accounts
DEmergency funds for unexpected vacancy
Explanation
A CapEx reserve is a planned accumulation of funds to cover future major capital expenditures — roof replacement, HVAC systems, parking lot resurfacing, elevator maintenance. In Idaho investment properties, prudent owners fund CapEx reserves regularly so large expenditures don't create financial crises. Reserve studies help estimate appropriate reserve levels.
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