Replacement Reserve Funding Calculator

Replacement reserves fund unit-level work.

Units

Per-unit annual reserve

Turnover rate %

Avg turn cost

Net surplus/deficit

-$92,400

Annual reserve deposit

$77,000

Annual consumption

$169,400

How the math works

Reserve = units × per unit. Consumption = units × turn rate × turn cost. Net = reserve − consumption.

220 × $350 = $77k reserve. 220 × 35% × $2,200 = $169k consumption. $92k deficit — under-reserved.

How to Use

Enter units.
Enter per-unit reserve.
Enter turnover rate %.
Enter avg turn cost.
Read annual reserve vs consumption.

Frequently Asked Questions

Per-unit amount?

Class A multifamily: $300-400/unit/yr. Class B: $400-500. Class C: $500-700. Older/smaller units: higher. Covers appliance, flooring, paint, minor bath/kitchen updates. Distinct from CapEx (major systems).

Adequacy?

Adequate reserve = annual deposits cover avg turn cost + inflation. 30% turnover × $2,000/turn = $600/unit/yr. Portfolio averaging 10-15% turnover + $2,500 avg = $300/unit/yr adequate.

Shortfalls?

Under-reserved properties: surprise capital calls, deferred work, tenant complaints. Over-reserved: inefficient cash use. Review annually vs actual turn costs, adjust deposits. Some lenders require minimum per-door.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.