What is the purpose of conducting a Capital Reserve Study?

The purpose of conducting a Capital Reserve Study is to determine the long-term capital needs of a property or community association.

With the guidance of this study, owners or managers can better plan and budget for future costs associated with maintaining, upgrading, and fixing the main structural features of the property, such as the roof, boilers, elevators, parking lots, etc.

The study also identifies the current state of these components and calculates how long they will be functional. By doing this, the owners or management can establish a reserve fund that, over time, builds up enough cash to pay these projected costs without levying additional fees or taking out loans.

A properly executed Capital Reserve Study offers monetary stability, lowers the possibility of unforeseen costs, and preserves the property's worth.