The second part of the Reserve Study is really a lot of number crunching and
estimating of costs. The
financial analysis section of a Reserve Study uses the cost and life estimate
information gained from the physical analysis to come up with a funding plan
that provides for each component’s reserve funding needs. In many cases when we
did our onsite inspection, the life and costs were readily apparent so
we will have to determine the best estimate of costs and when replacements will
be needed. The Financial
Analysis evaluates the associations reserve fund balance and income. The
financial analysis calculates a associations percent funded by comparing the
actual reserve balance to a fully funded balance. The reserve study then
estimates the total annual contribution necessary to defray the future costs.
What is Percent Funded?
The present status of the Reserve Fund is generally expressed in terms
of “Percent Funded.” The amount that an association should ideally have
in its reserve fund (according to the most recent reserve study) is
called the Fully Funded Balance. The percentage of the actual amount in
the reserve fund versus the ideal is said to be the account's percent
funded. For instance an association with an actual reserve fund balance
of $50,000 and a theoretical fully funded balance of $100,000 is said to
be 50% funded.
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2012Pacific Crest Reserves, LLC
Pacific Crest Reserves is a
locally owned Condominium and Home Owner Association consulting company.
Our Reserve Study Analysts work with associations to create timely and
accurate Reserve Studies. The Pacific Crest Reserves is an experienced
consulting firm committed to providing reliable reserve solutions to
Associations, regardless of size, complexity or location. We provide
easy to understand information for our clients to give them new ways of
thinking about how they can best manage their association assets. Our
focus is Reserve Studies to associations in the Snohomish, Skagit,
Island and San Juan Counties.