Don’t Let Your Reserve Study Expire

A reserve study is important to budget planning because it is used to determine whether there are enough funds to cover your association’s ongoing and future costs. Your board uses this information to plan future expenditures and avoid underfunded situations by determining what amount is adequate for its reserve fund.

A community’s reserves are anywhere from 15% to 40% of its total budget. Because it’s such a large portion, regular reserve studies are recommended. What’s regular? Some experts advise yearly evaluations; this might seem expense, but with many states adopting new regulations regarding reserves, it’s best to ensure you are well-prepared and well-funded for the current cost of repairs and replacements.

When it comes to such an essential budget item, the advice of a professional is key. That way, your community and your board is more likely to get accurate, current information along with helpful industry advice and best practices. The resulting solid, well-researched budget can build and maintain trust and confidence between your board and your residents because it keeps the board from working with the type of incorrect or outdated information that leads to Special Assessments.

In fact, avoiding special assessments is just one of the benefits to yearly, professional reserve studies. A current reserve study gives the board an accurate picture of the community’s finances and allows the community to accurately plan for major expenditures down the road.

The complexity of a reserve study can intimidate and overwhelm board members. Make it a less dauting task with a professional, and you might save your community time and money down the road. Contact us—we’re here to help.