A reserve study is a vital document crafted for an association-governed community that aims to protect the properties and their integrity. The purpose of conducting a reserve study is to evaluate the state of common areas and identify as well as address building infrastructure problems.
The study thoroughly examines wall covering, flooring, and fixtures of the building or property. It further assesses exterior building components, including parking lots, roofs, and exterior walls. If you’re planning a critical investment, it is essential to find out the cost of the HOA reserve study.
Importance of Reserve Study
If you’ve heard the expression “saving for a rainy day,” you already know why joint-owned properties request reserve studies.
Associations create a budget for significant needs like infrastructure replacement, building repairs, and other significant expenses using a reserve fund study. The HOA can decide on the property with the insight and information found in the reserve study.
Reserve funds shield a property’s value by paying for standard components such as maintenance and repair costs. When the reserve account is adequately funded, it doesn’t surprise residents with particular assessments.
A reserve fund study typically offers a thorough strategy for raising enough money to pay for necessary repairs and expenses in the future, boost the value of properties, and benefit both property owners and HOA community members.
Cost factors for HOA Reserve Study
It’s crucial to be aware of the three different sorts of reserve studies while trying to estimate their price:
- One complete reserve study
- Update on the reserve study and a site visit (update WSV)
- Update on the reserve study without a site visit (update NSV)
It is best to either speak with a reserve study analyst or comprehend your own demands because each reserve study type has a different amount of depth and associated fees.
Moreover, the reserve study cost is also affected by some factors, such as:
- The complexity of a property (total components, etc.)
- The size of the property (number of apartments, acres, amenities, and stories); (travel cost for analysts)
- Timing (asking for a reserve study during peak periods versus “off-season”)
All these cost factors of reserve study may vary from one association to other. You must understand their influence on the cost of the reserve study.
How Much Doe the Reserve Study Cost?
As mentioned above, you must consider several factors while researching your association’s reserve money. Each form of Reserve Study—Full, Update-WSV, or Update-NSV—has a different cost depending on the required
work.
Annual budgets and the interval between the current year and the last reserve study will also impact the cost. Because each study includes a unique analysis, it is challenging to compare studies. A rule of thumb is to consider at least 1 percent of your total budget for a “Full” Reserve Study as.
Summing Up
Maintaining common spaces like walkways, landscaping, and outdoor amenities used by members falls within the purview of homeowners associations. To ensure that your reserve fund is well-filled, it is crucial to have a reserve study performed by a specialist. Hire a management firm such as David Bach & Associates to conduct a budget-friendly reserve study.
