A house owner association has many responsibilities that involve taking care of the wellbeing of the community and maintaining its assets. From repairing the leaking roof of the clubhouse and updating equipment in the fitness club to maintaining swimming pools, an HOA has to take care of all these things. That's why they need funds to cover the expenses of the repairing and maintaining of the common area assets. But how much money should an HOA have in the reserve fund? A reserve study gives the answer to this question.
A reserve study is divided into two parts: physical analysis and financial analysis. It involves analysis of the condition of the common area components of the community and estimating their time and cost of repair. It might sound easy to plan a reserve funds, but it's not. So, it's better to hire a company for this purpose.
Here are a few reasons that explain why it's better to hire a reserve study professional:
Doing a reserve study is not at all easy or simple. A reserve study is a multi-layered process that involves taking care of numerous things. Like, asset assessment, report compilation, funds estimation, etc. So, it's hard for non-professionals to take care of all these matters without missing out on anything. But a professional HOA management company has expert people who know how to handle the complexity of the issue.
2. Possibility for Error
A big community with many common area assets and multiple management jobs for the house owner association calls for the possibility of error. And any error means a huge cost in the form of miscalculated funds and future maintenance plans. But a professional company reduces the possibility for errors because they have years of experience in construction and project management. Also, hiring a company gives you the opportunity to keep someone liable if things go wrong.
3. Availability of Workforce
Obviously, a single person can't do a whole lot of work from asset inspection to cost estimation. You need multiple people with different skill sets to perform different requirements of a reserve study. An HOA can't have them all. That might lead the association to go for special assessments, which are very costly. But if you hire reserve study specialists, they have all the right people to cover all the stages of the study skillfully.
4. Tools and Equipment
A reserve study might need special tools and equipment to detect problems in the assets of the community. All these special gadgets and tools are not something common that every HOA has in its store. So, that's another constraint that makes do-it-yourself study not a good idea. Professional companies do this job every other day, so they have the required gadgets for this purpose.
5. Someone to Question
The board members of an HOA can change, so it might get hard for the new members to ask how decisions were made regarding funds collection and maintenance if the study was conducted internally by the previous board members. But things become pretty easier if a professional company does the study. New members can continue the process and take charge of things because they just have to contact the company and ask them about the methodologies, considerations, etc., that went into making the decision.
6. Following a Timeline
It's important to follow a timeline to conduct the study. You can't drag a study for months because you never know when an unexpected issue might emerge. So, it's better to stay updated as early as possible. But following timelines becomes hard when the study is done internally. Personal businesses of the members, inexperience, and other factors become a hurdle in the timely accomplishment of the study. But when you hire a professional service, they follow a timeline because they know their work well.
A reserve study is an important part of any community maintenance project, and the wellbeing of the community heavily relies on it. So, it's better to let professionals handle things so that the association can remain at peace because they would know things will be handled professionally. But don't forget to hire the right company as all the benefits depend on who you hire for the services!