“Preserving the assets of communities through the art and science of planning”
What is a Reserve Study?
A Reserve Study is a budget planning tool which identifies the current status of the Reserve fund and a stable and equitable Funding Plan to offset the anticipated future major common area expenditures. The Reserve Study consists of two parts: the Physical Analysis and the Financial Analysis. This document is often prepared by an outside independent consultant for the benefit of administrators (Board of Directors) of a property with multiple owners, such as a condominium association or Homeowners’ association (HOA), containing an assessment of the state of the commonly owned property assets as determined by the particular association’s CC&Rs and bylaws. Reserve Studies however are not limited only to condominiums and can be created for other properties such as resort (shared vacation ownership) properties, apartment buildings, and office parks. Reserve Studies are in essence planning tools designed to help the Board anticipate, and prepare for, the property’s major repair and replacement projects.
RSI Reserve Studies offers 3 levels of Reserve Studies as well as an Annual Inspection to suit your community’s needs.
A Level 1 Reserve Study consists of a physical inspection of the property to determine which assets the community has, an asset list, a quantity list of each asset, measurements, a life expectancy of each asset, how many useful years are remaining in the life of the asset, and the current cost of replacement. We will also provide an analysis of the Reserve Fund and give a suggested reserve allocation amount.
A Level 2 Reserve Study can only be completed when we are provided with a previous Reserve Study from another company or we have conducted a Level 1 Study on the community. In a Level 2 Study, we inspect the property, but use the previous Reserve Study to determine the assets, quantities, measurements, and life expectancy of the community. We then use those numbers to determine the useful life remaining and the current replacement cost. We also provide an analysis of the Reserve Fund and give a suggested reserve allocation amount.
A Level 3 Reserve Study is only a verification of a previous Reserve Study. These studies are mostly done to determine a new reserve allocation amount. There is no physical inspection, therefore we just use the previous Reserve Study to determine how many useful years are remaining and what the current replacement cost is. We then provide an analysis of the Reserve Fund and give a suggested reserve allocation amount.
Annual Inspections: RSI Companies has 2 divisions: RSI Reserve Studies, and RSI Builders. By being part of a Company that offers General Contracting, RSI Reserve Studies has the unique opportunity of also offering Annual Inspections. An Annual Inspection is a much more in depth version of the Reserve Study. Instead of taking a general asset in your community and giving a unit price, an Annual Inspection actually inspects each asset to determine the current condition of it. We do this FOR EVERY ASSET IN THE COMMUNITY. Associations should do this to give a real base to the Reserve Study. Sometimes when assets have reached their useful life span according to the Reserve Study, they don’t need to actually be replaced. While the Annual Inspection does come with an added cost, RSI can assure you that it is well worth the money. It can save tens of thousands of dollars per year on maintenance recommended by the Reserve Study.