Most associations know that it is important to adequately fund their reserve items. However, the reality of actually doing it is a different matter. It takes time, effort, and political capital to properly fund reserves. Reserve schedules should be examined every year and not left on a shelf to collect dust. The political capital comes […]
effective reserve funding
5 Ways to Turn Around Your Reserve Fund Situation
It is common for associations to be a couple decades old and to never have had a reserve study performed. In fact, we hear that quite a bit. It is likely that if your association has never had a reserve study that they are not funding enough in reserves or are issuing special assessments to […]
Why Some Owners Don’t Want to Properly Fund Reserves
Reserves can be the most challenging part of the budget to board members. It is essentially setting money aside that will not be used right away or even for many years in some cases. Additionally, it can be difficult to determine how long something will last and what it will cost to replace. Some communities […]
What Should Be in the Reserve Schedule?
The purpose of the reserve schedule is to disclose reserve information to members of the association in the annual budget. The reserve schedule lists each reserve item, how much longer it will last (remaining life), how long it will last when new (useful life), and how much it will cost to replace (replacement cost). Also […]
Maximize Reserve Fund Interest
One of the powerful things about having a large reserve fund balance is the ability to gain interest earned on the money in the fund. The last several years since the Great Recession, however, have produced paltry returns, typically less than 1% for regular savings or money market accounts. Many associations just use money market […]
What is the Purpose of a Reserve Study
A reserve study is a tool for budgeting. Reserves funds are part of the budget. A reserve study will help the association manage their long-lasting assets. Part of the Budget Each year an association puts together a budget. Most of the budget consists of one-year-only expenses. The remaining portion is for items that will last […]
What Your Reserves Do
Reserve funds are the backbone of community associations. It is how they are able to pay for big ticket repairs and replacements. Funding reserves is advantageous to your association for several reasons: Keep Property Values Up The biggest reason why you fund reserves is they help maintain and increase property values. It is very difficult […]
How to Make a Reserve Study Most Effective
It has been discussed before that the best reserve studies are a team effort. In order to make a reserve study most effective, it is important to thing of the different parts that go into them. List All of the Reserve Items One thing an association can do is to make a list of all […]