What is a Condo
Reserve Study?
A condo reserve study tool is a tool created to help condominium associations understand which parts of the condominium they are responsible for. The condo reserve study helps evaluate the components of the condominium, how long they are expected to last, and the funds required to repair or maintain them.
It helps condominium associations plan their finances with confidence before unexpected expenses arise. A reserve study for your Condo helps you not to fall into the routine expenses trap, but prepares you wisely for all the future expenses and also saves you from hitting residents with unexpected special assessments.
Who Needs a Condo Reserve Study
Condominium Associations:
Any condominium association, whether big or small, with a shared community, requires a reserve study plan to protect itself from unexpected future expenses.Condo Board Members:
Board members of a condo hold a major financial management responsibility for the condominium. A Condo reserve study plan is required to plan them according to the Condo's needs.Property Managers
Property managers also require the condo reserve study to plan accurate budgets and keep the board members informed about the condo reserve funds on a year-to-year basis.High-Rise and Mid-Rise Buildings
larger and smaller high-rise and mid-rise buildings, especially require the condo reserve plans to maintain the mechanical systems, such as elevators and parking structures. Condo reserve plans also help them identify risks before they occur.Newly Converted Condominiums:
Condominiums converting from rental to ownership require the condo reserve study to accurately baseline components before beginning the conversion.Not sure if a condo reserve study applies to your association?
Contact our team, and we will be happy to assist you!
Is Your Condo Association Financially Prepared for Future Risks?
- Challenge 01'Unexpected' repair costsWhen a common component fails, a Condo Association can face an unexpected budget hit. The Condo Association reserve study helps you understand when to expect and adequately plan for expenses before they actually occur.
- Challenge 02Underfunded reservesMost associations discover too late that the reserves they set aside for repair, replacement and maintenance isn't enough. The Condo Association reserve study helps you compare your existing plan and reserves against industry standards and recommendations.
- Challenge 03Special assessmentsCommunity trust is lost instantly when an Condo Association is forced to pass a surprise special assessment. Proper reserve planning helps the Condo Association pass these emergency situations with confidence.
- Challenge 04Inaccurate budgetingAnnual budgets prepared without a proper assessment of future expenses are based solely on assumptions. A reserve study helps you use real numbers to calculate your budget and plan accordingly.
What is Included in Our Condo Reserve Study Plan
- RESERVE COMPONENTSComponent inventoryThe component inventory is the engine of a reserve study. It identifies and lists every major common element the association is responsible for maintaining, repairing, or replacing over time. The inventory tells associations what they are saving for.
- Physical AnalysisCondition assessmentOur team assesses your common areas and documents wear patterns, deferred maintenance, prior repairs, or premature deterioration. We assess current condition in an effort to set estimated lifespan to support better financial planning.
- Financial Analysis30-year funding planModel your anticipated expenses and reserve fund management strategy. Get a clear view of how your annual contribution will prepare you for the future and whether it will be enough to offset costs over the coming years.
Sample Reserve Study Report
the association’s financial and physical standing —
simplifying reserve planning in one easy to understand
document.
Benefits of a Professional Condo Reserve Study
Better financial planning
Less guesswork and more information to help with planning.Avoid special assessments for residents
Fewer surprises for residents and improved transparancy for Boards.Maintain property values in the market
Better values for properties with fully funded financial reserve planning.Accurate annual financial budgeting
Set contributions and budget with confidence.Long-term cost control
30-year projections, giving full financial control and strategic insight over the short to long term.
Don't just take it from us
We focus on the
detail and the big
picture.
- Experience
Thousands of clients
We have over 20 years of experience in working with communities of all sizes and situations. - Quality
Accuracy is all the matters
Our process helps us provide recommendations that enable you to take the right step forward. - Clarity
Clear guidance
Our reports provide clear and actionable steps to help move your association in the right direction.
Frequently Asked Questions
What is a condo reserve study?
A condo reserve study provides you with a financial plan that evaluates each component of your Condo. The reserve study includes each part of the Condo and provides an estimation of the finances required for the maintenance and repair of the component on a year-to-year basis.
What is a condo reserve fund, and how does it work?
A condo reserve fund is a special financial account into which funds are set aside for the coming year's unexpected repairs, maintenance, and replacements required for a condominium.
How much should a condo association have in reserves?
The right number of condo reserves is estimated through the condo reserve study. However, most conditions recommend maintaining a funded level of at least 70 percent, with 100 percent funded as the healthiest target.
How often should a condo association update its reserve study?
The standard update time for the condo reserve study is 3 years. It helps to get the update once the analysis of repairs and maintenance costs based on the updated markets is complete.
What does a condo reserve study cost?
The condo reserve study cost is based on the size and the condition of the condominium.
Is a reserve study required for condo associations?
This requirement varies from state to state. However, in most states, the condo reserve study plan is compulsory as part of the condo association's financial plan.
What does a reserve study for a condominium include?
A condo reserve study plan includes 3 components: first, the inventory budget analysis; second, the evaluation of the site and all components of the Condo. Thirdly, preparing a financial plan for the Condo's needs for next year.
If you have any questions, our team of reserve study professionals will contact you immediately.
