What is a Reserve Study?
A Reserve Study, or a Reserve Fund Study, is a long term capital budgeting tool used by homeowner associations to budget for capital reserve expenses.
The main purpose of a Reserve Study is to access the association’s financial standing and encourage it to budget wisely. When a Reserve Study’s recommendations are followed, associations have cash on hand for expected capital repair and replacement projects, and avoid unnecessary costly Special Assessments.
A Reserve Study details a property’s common area assets, determines the current strength of the association’s Reserve Fund account, and recommends a Reserve Contribution level.
Prospective home buyers should know what a Reserve Study is and how to interpret the results of a Reserve Study – this can be very helpful in choosing the right association to buy into. Below, find a concise breakdown of the main results of a Reserve Study.
Reserve Study Results
The Component List
The Component List section of a Reserve Study inventories an association’s commonly shared assets which the association is responsible for reserving for, as determined by the association’s CC&Rs and National Reserve Study Standards.
As shown above, the Component List typically provides information about the assets including their expected Useful Life (UL), Remaining Useful Life (RUL), and Current Replacement Cost.
Reserve Fund Strength – Percent Funded
The current status of an association’s Reserve Fund is represented in terms of Percent Funded, and reveals how well past and current homeowners have budgeted for the repair and replacement of an association’s commonly shared assets.
An underfunded Reserve Fund indicates a higher likelihood of an eminent Special Assessment and increased HOA contribution levels. A strong Reserve Fund Strength means that the association is in strong fiscal standing, and unlikely to encounter cash flow deficiencies.
Recommend Funding Plan
All Reserve Studies come with a recommended funding plan for the association to follow in upcoming years. The Funding Plan is based off of the prior two results, and recommends adequate monthly, quarterly or yearly Reserve Contributions.
Reserve Studies prepared by Association Reserves and DIYReserveStudy.com include a detailed 30-Year Funding Plan for your association. Our Funding Plans avoid Special Assessments when possible, account for both interest and inflation, and have a Full Funding Objective.
So what is a Reserve Study? We believe it is an essential, helpful long term budgeting tool for associations, that should be updated and reviewed by the board annually.
Order your DIY Reserve Study Kit today!
DIYReserveStudy.com is an Association Reserves company, and shares the same staff of over 21 certified Reserve Study Specialists. After receiving your association’s information, your report will be assigned to one of our skilled Project Managers. They will work with your data you provide to craft the Reserve Study report.
The primary differences between the DIY Reserve Study Kit and an Update No-Site-Visit Reserve Study are: 1) Who updates the Component List & 2) Price ($349 vs. $500+). Additionally, certain Reserve Study providers such as Associations Reserves, offer 1 free revision to the report at the No-Site-Visit service level. For more information, check out our detailed comparison table.
Perhaps. The answer depends on your association, its complexity, the opinions of the board members and your confidence in constructing a Component List.
DIYReserveStudy.com launched this past Wednesday and is off to a promising start!
For more information, please watch the above promotional video that we shot for the new website just last week! A transcript to the video has been provided below.
In it, the founder of Association Reserves, Inc. Robert Nordlund, PE, RS, proudly announces the launch of this new, cost-effective Reserve Study solution. Robert also highlights the site’s key features and explains the Do-It-Yourself Reserve Study process: clients purchase the kit, build and submit a Component List, and are sent their completed DIY Reserve Study within one week.
After watching, please tell us what you think of the new site: comment below!
For even more information, visit the site’s All You Need to Know page.
My name is Robert Nordlund, and I’ve been working in the Community Association Industry for over 25 years.
We know, based on the 30,000 Reserve Studies that we’ve prepared, that a whooping 70% of the associations in the United States are underfunded. <www.reservestudy.com/a-whopping-70-of-association-governed-communities-are-underfunded>
Underfunding Reserves not only puts your organization at an increased risk of unfair Special Assessments, it introduces a number of other concerns.
The path from underfunded to appropriately funded, is a journey, and a Reserve Study is your roadmap. But not all associations can afford the cost of a professionally prepared study.
Welcome to DIYReserveStudy.com.
Our new website is dedicated to a low cost, do it yourself solution for cost-concious, enterprising boardmembers and managers, just like you.
You can use this tool to create a Reserve Study for the first time, or update an existing Reserve Study.
Simply purchase the DIY Reserve Study Kit online, build and submit your association’s Component List, and receive your custom Reserve Study Report within 1 week. It’s that easy.
So how is this possible?
We’ll take the Component List that you provide us, and use our staff of Certified Reserve Specialists to calculate your Reserve Fund Strength, craft a Custom Funding Plan and publish a professional report.
If you are creating a Reserve Study for the first time, the Kit’s Instruction Booklet, which available for free download on the site, teaches you how to build a Component List according to National Reserve Study Standards. Otherwise, it’s just a matter of updating your existing Reserve Component List.
With one flat price for all clients and secure online billing, there’s no need to request a proposal.
Isn’t it time to start your association on a journey towards responsible Reserve Budgeting?
Order your DIY Reserve Study Kit today!
Are you tired of being in the dark about the strength of your association’s Reserve Fund?
Try answering the following questions:
What common area repairs are we responsible for? When will these projects need to happen? How much can we expect to spend? Are our current reserves on pace? How can we be financially prepared?
With over 70% of the nation’s associations “underfunded” and at risk of special assessments, deferred maintenance, declining property values, and Boardmember liability, we offer an affordable way for you to get the answers you need.
Association Reserves, Inc. is pleased to announce the launch of DIYReserveStudy.com! Our new site features an updated version of our DIY Reserve Study Kit for just $349.
DIYReserveStudy.com is the first Reserve Study company to offer a flat-price do-it-yourself solution with the convenience of immediate online purchasing. Customers can purchase the Kit, submit their Component List, and receive a custom Reserve Study Report within one week.
The path from “underfunded” to “appropriately-funded” is a journey and a Reserve Study provides the necessary road map. We’re proud that the DIY Reserve Study Kit empowers cost-conscious and enterprising Boardmembers and Managers to cost-effectively create their own Reserve Studies. Wise reserve planning can result in the priceless payoff of having sufficient funds on hand for timely repairs and replacements.
Please take a look around the site and tell us what you think!
The All You Need to Know page contains, well, you guessed it, all the information you will need to know prior to making your purchase, including a breakdown of how the kit works and information about our company.
The Kit can be used to create a Reserve Study for the first time or update an existing Reserve Study. We are confident that the Kit’s price-point and easy-to-understand instructions will make Reserve Studies accessible to associations across the US and abroad.
But don’t take our word for, check out these Client Testimonials from clients who have purchased the product.
Updated to ensure client satisfaction, the Kit includes an exhaustive Master Component List, detailing 70 of the most commonly used Reserve Components with typical Useful Life ranges.
You build the Component List, we handle the rest.
It’s that easy.