A Reserve Study is an essential document for any Association-governed community that wishes to protect the integrity of their properties. A comprehensive Reserve Study assesses the state of all common areas and addresses issues of interior building infrastructure. Along with flooring, wall covering, fixtures, a reserve study will also examine exterior building components like roofs, exterior walls, and parking lots. Knowing an HOA reserve study cost can help you plan for this critical investment.
Did you know that it is the responsibility of homeowners associations to maintain common areas like landscaping, walkways, and outdoor features shared by members? It is important to have a reserve study conducted by a professional so you can be certain that your reserve fund is well-stocked.
What is a reserve study?
A Reserve Study is a detailed report that explores a community’s repair and replacement needs in the long term. These “What if” studies are intended to minimize risk and provide a cost-benefit analysis on the expected frequency and cost of repairs over time.
A reserve study lets associations cover repair costs on components like roofing, structural walls, asphalt, windows and doors, parking lots, landscaping, and more.
Why is a reserve study necessary?
If you’ve ever heard the term, “saving for a rainy day”, you already know part of the reason why joint-owned properties request reserve studies.
Associations use a reserve fund study to establish a budget for building repairs, infrastructure replacement and other large expenses. A reserve study helps the HOA to make informed decisions about the property. Specifically, reserve funds protect the value of a property by covering expenses for maintenance and repair work on common components. A well-funded reserve account reduces the need for surprising residents with special assessments.
In short, a reserve fund study provides a detailed plan for collecting adequate funds to cover future repairs and expenses, increase property value, benefit the owners as well as the residents of an HOA community.
HOA reserve study cost factors in 2022
When you’re trying to determine the cost of a reserve study, it’s important that you realize there are three reserve study types:
1. Full reserve study.
2. Reserve study update with site visit (update WSV).
3. Reserve study update with no site visit (update NSV).
Each of these reserve study types has its own level of detail and accompanying costs involved, so it’s best to either talk with a reserve study analyst or understand your own needs.
There are also several factors that impact the cost of a reserve study, including:
• Property complexity (number of components, etc.)
• Size of the property (units, acreage, amenities, stories)
• Location (travel time for reserve analysts influences cost)
• Timing (requesting a reserve study in busy months vs. “off-season)
Each of these HOA reserve study cost factors can vary from association to association, however, it’s important recognize their influence on the price of your HOA reserve study in 2022.
How much do HOA reserve studies cost?
In summary, there are several factors that need to be considered when choosing how to study your association’s reserve fund. The amount of work involved with each type of Reserve Study: Full, Update – WSV or Update – NSV defines its respective cost.
In addition, annual budgets and the amount of time between the last reserve study and the current year will affect the cost as well. Each study encompasses different analysis; therefore, it is difficult to make an “apples to apples” comparison among studies. As a general rule of thumb, budget at least 1% of your total budget for a “Full” Reserve Study.
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Our professional reserve study analysts have performed hundreds of inspections, site visits, and reserve fund analyses for joint-owned properties throughout California. Our relentless focus on accurate projections, timely results, and fair reserve study pricing has been our defining difference while serving our clients. If you’d like to learn more about our services, request a proposal today!
