Property Management
What is 'capital reserve' or 'replacement reserve' in property management budgeting?
AMoney reserved for emergency repairs only
BFunds set aside regularly to cover future large capital expenditures (roof replacement, HVAC, etc.) rather than treating them as unexpected expenses✓ Correct
CA legal requirement for all Idaho rental properties
DThe owner's personal emergency fund
Explanation
Capital reserves are funds set aside from property income to pay for future large capital improvements and replacements (roof, major HVAC, parking lot). Regular contributions prevent large unexpected expenses from disrupting cash flow.
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