Experiencing Virtual Reality in domestic and other uncontrolled settings is challenging due to the presence of physical objects and furniture that are not usually defined in the Virtual Environment. To address this challenge, we explore the concept of Substitutional Reality in the context of Virtual Reality: a class of Virtual Environments where every physical object surrounding a user is paired, with some degree of discrepancy, to a virtual counterpart. We present a model of potential substitutions and validate it in two user studies. In the first study we investigated factors that affect participants' suspension of disbelief and ease of use. We systematically altered the virtual representation of a physical object and recorded responses from 20 participants. The second study investigated users' levels of engagement as the physical proxy for a virtual object varied. From the results, we derive a set of guidelines for the design of future Substitutional Reality experiences.