DIY Reserve Study and Reserve Study Software Frequently Asked Questions

Frequently Asked Questions

Once I perform the financial analysis using the RFA, how do I then create the  Reserve Study Report?

Once you have finished entering the reserve component data and completed the financial analysis, then, with a simple click of your mouse, you can create a detailed reserve study report which meets all applicable standards of practice and, where they apply, regulatory requirements.

This report is created using Microsoft Word (which must be installed on your PC) and includes all applicable tables, charts and graphs.  The report is created with a single click of your mouse and takes only a few seconds to create.

For additional details refer to the videos.  You can also view this sample report.

Where can I get support once I purchase the RFA?

The first place to obtain support is the online RFA Discussion Forum.  Support topics (Q & A) are archived there and available for searching.  This forum is monitored and as new questions are asked, answers are provided and made available for all users.

You can also use the Contact Us page to submit a question.

What are the prerequisites for using the RFA on my computer?

The RFA will run on a PC with Windows 7 or Windows 10.  The PC must have Microsoft Excel and Word ... any version from Office 2010.  As Excel for Mac has functional limititions compared to Excel for Windows, the RFA will not run on a Mac.

How do I get started with a DIY reserve study?

Reserve studies consists of two parts:  the physical analysis and the financial analysis.  It is up to you to do the physical analysis.  The RFA will do the financial analysis.

For performing the physical analysis, refer to the RFA Libary page for reference materials and guidelines on how to get started.  Pay particular attention to the guidelines published by the State of California and Hawaii and to the reference documents for the DIY reserve study.

As a measure of comfort and confidence building, this is not as daunting as it sounds.  With due diligence and a little effort, your association can perform a reserve study with excellent results and save a considerable amount of money in the process.

Can I use an existing reserve study as the basis for a new study?

Yes, of course.  When you use an existing reserve study as the basis for a new report you are performing what is known in the industry as an update.  There are two types of updates:  An update with a site visit and an update without a site visit.  In other words, you are doing an update with or without assessing the actual condition of the assets. 

If you are performing the reserve study yourself, then you are likely very familiar with the assets and are fully aware of their condition ... in which case you would be performing an update with site visit.  If you are remote and, for example, only updating financial data ... you may be performing an update without a site visit.

What are reasons for a DIY Reserve Study versus hiring a service organization to perform the reserve study?

If you have never had a reserve study, an argument can be made to have a reserve study performed by a service organization.  This will generally provide a study that is likely to be performed by a knowledgeable person(s) and include all relevant reserve components.  But, take care choosing the provider as there are many fly-by-night operators.

If you do choose to perform the initial study yourself, take the time to educate yourself on the process.  To that end, this web site can be your "go-to" source for material.  Additional information is available on the Library page.

If you pursue doing reserve study yourself, consider using a group of volunteers from your organization.  This fosters cooperation and you have the benefit of gaining the insights from multiple people.  And, at the end of the day, less likelihood of objections to the results when a team is involved in the process.

If you already have a prior reserve study, then there is a very strong argument for updating that study yourself:

  • Lower costs
  • Established list of reserve components (typically they do not change)
  • Updating the physical analysis is relatively easy to perform
  • You have greater control of the process

From my own experience, smaller communities, which generally have fewer and less complex reserve component infrastructures, are excellent candidates for the DIY reserve study. 

How valid are warnings from professional service providers to avoid do-it-yourself reserve studies?

Any organization considering undertaking a DIY reserve study should not take the task lightly.  If you take the time to understand the process before embarking down that road, there is every reason to conclude that your results will be perfectly valid and every bit as good as a reserve study performed by a reserve study company.

When I see warnings advising HOAs to avoid DIY reserve studies, I find that these warnings are generally made by service providers in the business of marketing their services.  They generally cite themselves as professionals and experts in the field with the implication or inferrence that HOA Board members are not qualified to perform a reserve study.  As these businesses happen to sell their services providing reserve studies for HOAs, it is pretty clear why they are trying to sow fear and doubt.

If you take the time to review the guidelines that are available on this site and gather a team from your association, there is no reason why you should not be able to perform a very credible reserve study.  Using the Reserve Funding Analyzer application (also available here), greatly simplifies the financial analysis and it will produce the reserve study report for you.  Especially useful if you do not have experience with capital reserve funding analysis.

Does the RFA comply with national standards for reserve studies?

Yes.  The International Capital Budgeting Institute (ICBI) and the Community Associations Institute (CAI) have publsihed standards and guidelines for reserve studies.  The Reserve Funding Analyzer is in full compliance with those standards.  In addition, the RFA meets or exceeds guidelines that have been published by various states in the United States.

There are no national standards in Canada other than those of specific professional organizations, such as the ICBI and CAI. 

Is there a demo version of the RFA?

Yes.  A free trial version is available for evaluation.  Click here to download.

You need to have a Windows PC with Microsoft Excel installed, otherwise, the demo version will not run.  This demo version will not run on an Apple Mac.

Who can perform a reserve study?

With the exception of the State of Nevada, reserve studies can be created by volunteer board members, their professional managers, one of many professionals specializing in the preparation of reserve studies, or any person whom the HOA board deems qualified to conduct the study.  

In Nevada, the person conducting the study must be registered and background checked by the Nevada State Department of Real Estate – unless the community contains less than 20 units and is located in a county with a population less than 55,000. 

What are the statutory requirements for a reserve study?

Within the USA, requirements for reserve studies vary by state.  Community associations are legally mandated in 30 states to have some form of reserve planning or disclosures. 

Consult your local jurisdiction and your CC&Rs or bylaws to determine your regulatory requirements.

The following map illustrates those states that have requirements for reserve studies.

Reserve study requirements in the USA

Click on the image to enlarge

In Canada, legislation governing condominiums and strata corporations is provincial.  Most provinces have some form of requirement for reserve funding / reserve studies.  In Canada, reserve studies are referred to as a Reserve Fund Study, Contingency Reserve Fund Study, Replacement Reserve Study and Depreciation Report (British Columbia).

Among professional organizations, the International Capital Budgeting Institute (ICBI) recommends reserve studies be prepared on the cash-flow basis and that the reserve study be updated at least annually.

How often should the reserve study be updated?

The International Capital Budgeting Institute recommends that reserve studies be updated on a regular, periodic basis.  The general consensus is that this should be done on annual basis.

In some localities this is mandated by legislation.  But, this will vary by locale.

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