Hello Blog Readers,
I warmly welcome you all.
Before I start my discussions, let me introduce - Reserve Study
Brian McCaffery, President of McCaffery Reserve Consulting earned his Bachelor of Science Degree in Architectural Engineering from the University of Colorado in Boulder.
During his professional career, Brian has worked for multiple companies that perform reserve studies. He has performed over 4,000 reserve studies throughout the state of California and the United States. Brian is a certified Reserve Specialist, designated by the Community Associations Institute (CAI).
The Reserve Specialist designation is awarded to experienced, qualified reserve specialists, who through years of specialized experience, can help ensure that your community association prepares its reserve budget as accurately as possible.
The reserve study consists of a number of estimates and assumptions. All of them are important, but one stands out as having significant impact upon the calculation of needed reserves - remaining life of components. As an example, if your previous reserve study indicated that the remaining life of the roof was 15 years and it is now determined to be only 10 years, then you have much less time to accumulate the needed funds, which translates into higher assessments. That is considered a change in estimated remaining life.
A Reserve Study is a technical and financial analysis of the community-owned assets within a common interest development. The study should include the following elements in a clear, easily understood format:
(1) Component inventory and details
(2) Remaining useful life estimate of inventory
(3) A current replacement cost estimate for each component
(4) An analysis of the association's current financial condition
(5) A funding model summary
(6) Funding recommendations, including a 30 year projection
(7) Appropriate disclosures
1. The Reserve Study establishes a schedule by which funding for the maintenance, repair and replacement of major common area components are achieved.
2. This funding schedule provides assurance to property owners that funding to maintain the property will be available when needed.
3. Community members are assured that their investment in the community will be enhanced over time through an equitable and systematic approach to accumulating the replacement reserves.
4. For those responsible for the governance and management, the well prepared reserve study is an invaluable management tool; providing community Boards and managers with the information they need to better engage in long range planning and advance scheduling of major component repair or replacement.
5. The Reserve Study provides accountability in the form of a written, historical record and helps to document the accountability of past managers and association boards with regard to the stewardship of association assets or reserves.
An important variable for you to consider is whether to go over the existing siding with the substitute material or strip off the existing siding before applying the challenger siding. Clearly, there is a significant increase in cost for the latter. The nature of the substitute siding will help you evaluate the likely appearance of siding over siding as part of your decision. Invoices for the past cost of repairs and painting will be well known. After all, those costs are why you are doing this exercise.
Your return on investment results from computing when the accumulated costs for repairs and maintenance equals the cost of the re-siding. If the period of time and the aesthetics of the application are acceptable and the funds are available for the initial investment, then go for it.