Replacement Reserve
Money set aside on a schedule to replace furnishings and equipment that wear out. It is a recurring sinking fund, not a one-time cost. STR wear runs faster than in a personal home.
A replacement reserve is money you tuck away regularly so that when the sofa sags, the mattress dies, or the blender quits, the cash is already there. Think of it as a sinking fund: a recurring expense you fund a little at a time, not a surprise you absorb when something breaks.
Short-term rentals chew through furnishings faster than a home you live in, because a stream of guests is harder on a property than one careful owner. A common illustrative benchmark is to reserve enough to replace 15 to 20 percent of your original furnishing value every 3 to 4 years, then adjust based on what your own listing actually goes through.
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Related terms: Startup Cost , Furnishing Budget
Last updated . Part of the FinExplained finance glossary .