Reserve studies are one of the most powerful planning tools in an HOA board’s arsenal. It provides a 30 year schedule for major repairs and replacements and a funding plan so the board can gather the gold it needs to get projects done as they come due. It’s a wonderful thing.

No one has control over these elements and those triggered by the Three Ws: Weather, War and Weality (a bit of alliterative license with “reality”). Life in various forms simply happens and can have a dramatic impact on financial forecasts like reserve studies. So, all reserve studies need to be reviewed and revised each and every year to remain accurate. Not all reserve study update factors carry the same financial weight and impact. The skewing of inflation rate and investment yields alone can swing a medium sized reserve fund hundreds of thousands of dollars over a thirty year period. For the most current inflation rate, go to www.inflationdata.com.

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