This video serves as both an example of a reserve study and a detailed, step-by-step guide to help you confidently understand and interpret your own reserve study.
We’ve developed a series of videos designed to help property managers and board members gain a clear understanding of how different cash flow and component funding strategies operate.
Threshold Funding (Reserve Study): A reserve funding strategy where a condo or HOA maintains a reserve account balance above a minimum “threshold” to cover future repairs and replacements. It aims to ensure financial stability by keeping enough funds to handle major expenses without special assessments, while balancing affordability for residents. Often used in Florida to comply with regulations like the Structural Integrity Reserve Study (SIRS).
Baseline Funding (Reserve Study): A reserve funding approach where a condo or HOA maintains just enough funds in the reserve account to cover anticipated major repairs and replacements as they occur, with no surplus. It aims to minimize homeowner contributions while ensuring funds are available for expected expenses, but it carries higher risk of special assessments if unexpected costs arise. Commonly considered in Florida for compliance with reserve study requirements like SIRS.
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