A reserve study is a crucial tool for managing assets within any community development. The reserve study evaluates the property’s physical assets and analyzes the reserve funds necessary to support anticipated repairs, upgrades or expansions to the community’s shared property.
This study is a powerful arrow in any association’s quiver because it helps manage property expenses early on to ensure funding is available when the community needs it. It also helps to create accountability among the association’s Board members, management team and property owner.
What Does the Reserve Study Reveal?
Reserve studies analyze both the physical assets of a community, as well as its finances.
- The physical analysis examines the community’s shared physical assets (such as a community recreation center or golf course) and includes comprehensive reporting about the community’s inventory, physical condition, life and valuation estimates.
- The financial analysis provides recommendations about the community’s current fiscal resources, as well as what funds should be set aside, and how, to support longer-term capital expenditures.
Who Should Conduct the Reserve Study?
Conducting a reserve study correctly requires the expertise of association management professionals who understand all of the components necessary to deliver accurate reports that will properly guide the association’s budget and maintenance decisions.
The bottom line is that a reserve study is not an option for effective association management, it’s a must-have!
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