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 […]
Reserve Study
Five Myths of Reserve Studies
Reserve studies are an essential part of property management, especially for larger community associations. Many communities get them performed and rely on them for the long-term planning part of their budget. Nevertheless, some communities are reluctant to have one done. The following are five myths regarding reserve studies. Myth 1: Reserve studies are too expensive […]
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 […]
Reserve Study Frequently Asked Questions Part 8
Why are our reserve dues higher or lower than neighboring communities? The reserve dues in your association have very little to do with other associations’ reserve dues. There are many factors that go into figuring out the current reserve dues. Some of the main differences for current reserve dues of competing communities may be: The […]
Why Some Associations Hesitate to Get a Reserve Study
Associations can be reluctant to get a reserve study for a number reasons. There can be a general misunderstanding of what a reserve study does and what it accomplishes. Here are some of the most notable reasons community associations hesitate to get a reserve study: We Can Do It Ourselves This sentiment is pretty common. […]
Should an Insurance Deductible be a Reserve Item?
Many associations have relatively high insurance deductibles, sometimes as much as $100,000 or $200,000. This is the case in particular in hurricane prone areas. I have been asked several times if it should be a reserve item or how to go about funding it. Sometimes I already encounter it in an association’s current reserve schedule […]
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 […]
How a Reserve Study Can Save Your Association Money
Reserve studies are beneficial to associations for several reasons. Proactively Get Organized A reserve study helps an association get organized with its capital assets. A reserve study will have an itemized section for that shows projected asset repair and/or replacement year by year. This serves a meaningful purpose. If an association is not well organized, […]
Reserves for New Community Associations
There is a lot of organization involved when setting up a new community. Budgeting for reserves is not necessarily the first thing that new boards may be concerned with. However, the opposite effect of not setting up reserves properly can have lingering effects. Money that is not set aside is an opportunity lost to fund […]
Reserve Study Resources
Since reserve studies and reserve funding are a niche aspect of community association planning, finding information about their background and methodology can be difficult. There is generally a lack of easily accessible information about reserve funding on the internet or in books. The following list is some of the best information available on reserve studies […]
Reserve Study Checklist
When making a decision on who is reasonable candidate to perform a reserve study for your association, here are a few things to keep in mind. 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 […]
Understanding Your Reserve Study
The first time you receive a reserve study, it can be a lot of information to take in. Sometimes the client can be surprised at the suggested funding amounts. This can be referred to as “sticker shock.” However, it is important to remember that this is the recommended amount. This recommended amount is not a […]