6 Factors To Consider When Choosing An HOA Reserve Study Company

So you’ve decided to do a proper reserve fund study? Then you’ll want a reserve fund specialist helping you through the process. That way, you can create the most suitable reserve study report for your community’s planning needs.

While the law in some states requires homeowner associations to conduct reserve fund studies, it often does not specify who should do them.

Consequently, anyone can claim to be an experienced HOA reserve study company.

So, what should you look out for when finding the best HOA reserve study service for your budgeting needs?

1.   Location. Location. Location.

 

Homeowner association affairs fall under state laws. Every state has different regulations that guide conducting reserve studies.

Now picture this:

There are specific reserve study regulations to deal with if you live in California than if you live in Utah or Florida. The rules are often long and complicated for each state.

You may find that your local authorities also have additional requirements you need to implement in your reserve study process.

So, look for a reserve study company near you that understands the local regulations.

For example, it helps if a reserve study company in Florida has conducted many such projects in Florida than in another state.

2.   See if the Company Follows the Latest Reserve Study Standards

 

The International Capital Budgeting Institute (ICBI) has standards that help create reliable reserve studies.

These Generally Accepted Reserve Study Standards help in the following:

  • Define the service quality you should receive from a reserve fund specialist in the form of independent studies, reserve management plans, and consulting services.
  • Define what is included in a comprehensive study.
  • Provide accurate calculation approaches for considerations such as asset valuation, appreciation, and depreciation rates.
  • The ICBI provides an easy to understand report format so your community and HOA board can understand what it recommends.

Some companies do not adopt these standards and give you simple solutions for your valuable assets. Ensure that you hire reserve specialists who follow these guidelines.

3.   Ask for the Right Professional for the Job

 

Ideally, reserve studies should be done by an architect, engineer, or construction professionals. But the industry is becoming competitive.

Many companies survive the times by providing DIY reserve study software.  However, the software can be inaccurate, giving wrong projections.

So, ensure that whoever might be handling your project has the relevant qualifications for it.

4.   Experience Matters, Too

 

When a reserve study company has been around and conducted many studies, they understand how to source important data as efficiently as possible.

Remember, you want an actionable report that the board won’t shelve for ages because they cannot understand how relevant it is to your particular community.

You can also consult them about the best practices your HOA association needs to always keep in mind to preserve your assets in good condition.

So check with accrediting bodies such as the Community Associations Institute to discover reputed vendors.

The organization only qualifies companies that have prepared at least 30 full reserve studies within the past three years.

5.   Ask for References

 

Have a neighboring community conducted a successful reserve fund study recently?

Perhaps some of your homeowners know friends, relatives, or work colleagues that know or work at top HOA reserve study companies.

Spread the word around that you are open to working with an experienced reserve fund specialist.

When you get a referral, follow it up by asking the company to provide examples of recent projects they are most proud of.

Be sure to pay closer attention to projects similar to your HOA needs, such as the types of joint assets, common areas, and members’ financials.

6.   What is the Cost Structure?

 

Your budget will ultimately determine whom you hire. If you have a good account, you can hire an engineering firm for thorough physical analysis.

You can also hire highly-experienced accountants to make accurate, long-term financial projections.

Still, you can find a company that offers both assessments affordably.

So, talk to one company about your goals, get a quote, and compare what they’ll offer you to what another vendor is willing to provide.

Over to You

 

Remember to look beyond the price tag.

Notice if the quote includes additional items such as ongoing consultations and follow-up studies. Those extras will vary from one service provider to another.

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