Mendell Gosnell, CPMPrincipal Broker, Centurion Real Estate Services · Helping Real Estate Investors Build Generational Wealth Through Smart Property Management | Branch Offices in Salem, Corvallis, Eugene and Redmond.

The #1 Misunderstood Rental Reserve Mistake Owners Make

2 Jul 2026 · 0 min

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0:29

In this brief segment, the speaker addresses a common misunderstanding among rental property owners regarding reserve funds. He explains that reserves are not a monthly cash set‑aside for future capital expenses like roof replacement; instead, the reserve money is held in the client trust account. The amount to be reserved is designated within property‑management software, which often pre‑pays the reserve based on a predefined limit. This clarification aims to correct the misconception and guide owners on proper reserve handling.

A lot of times it's interpreted incorrectly. So this is not a reserve that you're setting aside for your property on a monthly basis for capital expense improvements. Hey, I've got to replace my roof in 5 or 10 years. It's actually in the client trust account. However, we do designate that in the property management software, whatever that limit is, and they'll actually prepay that reserve amount