Rent Real EstatePicture Perfect Reserves in Homeowner Associations
A reserve study identifies the association"s future repairs and replacements like a snapshot in time. Imagine that you could picture the buildings and grounds as they would be in five, ten, even thirty years. A reserve study acts just like that by estimating the useful life of the common elements and the cost to replace them in the future.
A reserve study uses a detailed component inventory analysis of the association"s common elements having useful lives of 3 to 30 years to project maintenance scheduling and a funding plan. Those "elements" consist of the obvious, like Roofing, Painting, Paving, Pool Plastering, and the not-so-obvious like Treework, Landscape Renovation and Safety Inspections (elevator, fire sprinklers and alarms, tripping hazards). Even the smallest associations have at least 15 items that should be included. Large communities could have hundreds.
For more on this subject, see www.regenesis.net
Your common elements change and the assumptions made for a reserve study change as well over time. Reserve studies can be affected by new labor-saving techniques, building designs and materials that reduce projected costs or extend useful lives. As these changes take place, so should your reserve study. Annual review and updates confirm that the schedule and costs are still accurate. And it’s not always bad news that affects the review.
Age, condition and rate of deterioration can be positively impacted by preventive maintenance implemented by the association which increases useful lives. Changes in area inflation and the actual interest earned from invested reserves need to be revised as well.
The good news is the annual review is a snap compared to the initial reserve study which requires significant field work to compile data. The annual review merely tweaks certain elements unless there is a significant issue that requires professional review, like structural dryrot or drainage problems.
Now that you’re focused on reserves, it’s time to load the film and start shooting. Frame by frame, the results will develop picture perfect.