Multifamily Reserve Studies

Reserve Study

A Reserve Study is a financial plan for commonly owned Multi-Family properties and commercial institutions. A Reserve Study identifies all common and limited common property owned by a community that will require replacement or refurbishment over the life of the property. Reserve Study reports; detail all common property, identify typical life spans of each component, estimate the cost to repair or replace each common part, evaluate the current fund status of the property’s reserve fund, and recommend annual contributions to meet property needs.

Reasons to Conduct a Reserve Study

• Protect the value of your property.

• Balance the contributions made by members.

• Maintain and enhance your common areas.

• Be financially prepared for scheduled expenses.

• Depending on which State, County, etc… your property is located, Reserve Studies may be required by the law. *

What is a Reserve Study?

A reserve study is a long-range capital planning tool that helps boards anticipate and prepare for the repair and replacement of their community’s common assets. A reserve study includes both an in-depth analysis of the property’s physical condition and a thorough examination of current reserve funds. The resulting reserve study report presents a prioritized schedule of capital projects and a reserve funding plan to offset future costs associated with repairing and replacing the common assets over the next 30-years.

Executive Summary including key findings, prioritization of near-term capital projects, and projected reserve fund cash flow over the next 30-years.

Reserve Expenditures table that presents your entire component inventory and prioritizes each of your community’s capital projects in an easy-to-read format.

Reserve Funding Plan that meets your community’s future project needs and minimizes the risk of additional assessments.

A Comprehensive Report that delivers asset specific insights to enhance your ability to make informed decisions.

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Reserve Study Levels of Service

Financial Reserves

Often times the bank or lending institution will require you to have reserves possibly in escrow to cover loan and carrying expenses for a specific period of time, remember their core concern is that you're able to repay the debt.

In order for the capital expenditures to be properly accounted for during any given period of time, a reserve study is performed where the materials and components of the property improvements are assessed for condition and economic remaining lifetime, and the costs applied, delineated over the remaining time period before replacement is estimated to take place to allow for proper budgeting.

Cost guides and inflation ratios are used to apply accurate cost measures to the calculations, however, the eyes of the assessment professional are the major contributing factor to the estimated remaining life of the various components covered in the report.

If your buildings need to be properly studied for component depreciation and reserve study analysis, feel free to contact us by visiting our website at: www.ReserveStudy.net