HOA Reserve Study

What is a reserve study for HOAs?

An HOA reserve study looks at the property and reserve account and analyzes all foreseeable capital improvements and repairs. For example, if your community has a clubhouse with a roof that needs to be replaced every ten years, the reserve study will advise how much and how quickly your association needs to save to make the repair at the appropriate time.

Typical reserve studies are comprised of two parts, the physical analysis and the financial analysis:

• Physical Analysis: Evaluates the physical status of the association and estimates the repair and replacement costs of the major common area components.

• Financial Analysis: Assesses the current reserve fund status and recommends an appropriate reserve contribution rate.

Who can perform a reserve study?

Because reserve studies for homeowners associations are so involved, HOAs should hire a qualified and experienced Reserve Specialist or Reserve Analyst to perform a reserve study. There are multiple HOA reserve study companies available across the country to fulfill our community's needs. Be assured that your Board of Directors will find the best option for Triangle Trace.

What happens during an HOA reserve study?

A reserve study is a lengthy process with a lot of moving parts. During a full reserve study, the following tasks will be completed by an association or one of the many HOA reserve study companies:

1. Component inventory

2. Condition assessment based on visual observations

3. Life and valuation estimates

4. Fund status

5. Funding plan

Full reserve studies are the most comprehensive and expensive type of reserve study—but they typically only need to occur once unless you’re looking for a second opinion. If an association previously conducted a full reserve study, you may have the option to get a less-detailed, more affordable type of reserve study that can be done with or without a site visit in the subsequent years.

How much does a reserve study cost?

The cost of a reserve study varies with the size, complexity, and location of your community. The cost of conducting a first-time reserve study for a small HOA can start at $2,400 - $10,000

What are the benefits of a reserve study?

It’s a good idea to get one for the benefit of all homeowners. Here are a few reasons why an association should get a reserve study:

1. Minimize the possibility of special assessments or loans

2. Demonstrate good financial stewardship to residents

3. Simplify annual budgeting processes

4. Fulfill legal requirements

5. Better plan for property repairs and replacements

6. Enhance property values

7. Easily accommodate and schedule future capital projects and costs

8. More accurate review of future vendor bids

Will Triangle Trace have one completed?

Yes, the 2025 budget reflects a new line item that will allow us to identify a qualified organization to complete a reserve study for our community. Achieving this step will allow the community to plan for future expenses in a comprehensive way and lessen any need for knee-jerk reaction spending.

Additionally, the ACB has also agreed to add a reserve study to their budget for 2025, thus we will have a complete and comprehensive view of future expenses for Triangle Trace and any items cared for in our sharing agreement (ie. Amenity Center, pool and common areas).