What is a good reserve fund for a condo?
If your reserve is 70 percent funded or more, you’re probably in good shape [source: Tempe Condo Experts]. That means if your reserve study says you should have $20,000 in reserves, you’re in good shape as long as the account has $14,000. Smart buyers will check the percentage of their condo’s reserve before buying.Click to…
If your reserve is 70 percent funded or more, you’re probably in good shape [source: Tempe Condo Experts]. That means if your reserve study says you should have $20,000 in reserves, you’re in good shape as long as the account has $14,000. Smart buyers will check the percentage of their condo’s reserve before buying.Click to see full answer. Keeping this in view, how much should a condo HOA have in reserves?Ideally, the HOA wants to have a 100% funded reserve meaning that it has enough money to cover all anticipated costs. However, having at least 70% is a good start. Less than that and the HOA runs the risk of having to implement special assessments or raise association fees to cover costs. how much does a reserve fund study cost? The Cost of a Reserve Study Their reserve study would likely only cost somewhere between $300 and $1,600 dollars. This is a very small price to pay to make sure that the association is saving enough money to maintain their reserve components and prevent deferred maintenance and decreased property values. Also question is, what are reserves for condos? Reserves are money set aside to cover emergency or major repairs. When you are selling your condo unit, a prospective purchaser will want to know whether your community association has adequate reserves. (How much should a contingency fund be?Regulation 6.1 requires that the Contingency Reserve Fund be equal to at least 25% of the Operating Fund. If the reserve fund is below that amount at the time of the AGM, an amount equal to 10% of the operating fund must be contributed annually until the Contingency.
