1. Make sure the firm you select is truly in the business of providing reserve studies.
Sometimes associations wind up contacting someone who can perform reserve studies, but does not specialize in them. This is a setback because someone who only does reserve studies a fraction of the time, may not know the reserve study nuances of performing the assignment. Like many things, the more time someone devotes to a specific thing, the better he/she will become. Firms that specialize in reserve studies also are in contact with associations much more in regards to reserve funding issues or best practices.
2. Make sure you know specifically who in the firm will be performing your assignment.
Often times big firms market their expertise, but they have a wide range of people working for them. The range could be as wide as someone very new to the business versus someone with years of experience. Every association deserves to have a devoted professional with years of experience perform their reserve study. The experience should be in the physical analysis and financial analysis of the items, not just one or the other.
3. Look for a professional designation of the individual you are considering to perform an assignment.
The RS designation (reserve specialist) is typically considered the industry standard for individuals who perform reserve studies. The RS designation means that the analyst has been performing reserve studies for at least 3 years and has had reports reviewed by the Community Associations Institute (CAI). CAI is the organization who issues this credential and issues the national reserve study standards. Seeing the RS designation will ensure that analyst is a devoted professional to perform reserve studies.
When deciding to get a reserve study done, the report you will ultimately receive will be comprised of two parts–the physical analysis and the financial analysis.
The physical analysis is composed of the following parts:
- Component Inventory
- Condition Assessment
- Life and Valuation Estimates
The financial analysis is composed of these following parts:
- Fund Status
- Funding Plan
Even though reserve study providers may provide reports with the abovementioned parts, there can be a big difference in the accuracy, thoroughness, completeness, and analysis of the reserve funds of your community. Choosing a reserve study provider can be difficult, but there are many reasonable choices as long as you know what to look for.