Should Your Condo Board Just Save More Instead of Paying for a Reserve Study?

Short version: a reserve study doesn’t tell your board to save more. It tells you what order to spend in: what’s urgent and what can wait. Without one, most boards over-save for the thing that’s fine and under-save for the thing that isn’t.

The question we hear most

“Couldn’t we just save more instead of paying someone $2,500 to tell us to?”

This summer we proposed reserve studies to more than 14 of our condo associations. A lot of boards pushed back with exactly that. Just raise the reserves. Why pay for a study?

It’s a fair question. It’s also the wrong one.

The best answer came from a trustee

It didn’t come from us. It came from a trustee talking to their own board:

“I don’t want us saving hard for a new roof and putting off the fence that’s falling apart if the roof is actually fine. But I don’t want to suddenly need $20,000 for a roof because we didn’t plan.”

That’s the whole point.

What a reserve study actually does

A reserve study doesn’t tell you to save more. It tells you what order to spend in:

• What’s urgent.
• What can wait.
• Roughly when each big bill is coming.

Without one, you’re guessing. You end up over-saving for the thing that’s fine, or under-saving for the thing that isn’t. Usually both.

Ask a better question

Don’t ask “should we save more?” Ask “what’s going to break first, and are we ready for it?”

Common questions

Can’t our board just raise reserves instead of paying for a reserve study?

You can, but you’d be saving blind. Raising reserves doesn’t tell you what needs money first. A study tells you what order to spend in, so you don’t put off an urgent repair to save for something that’s actually fine.

What does a reserve study tell a condo board?

What’s urgent, what can wait, and roughly when each big expense is coming, so the board can plan the budget around real needs instead of a guess.

What happens if a condo association skips the reserve study?

Boards usually end up over-saving for components that are fine and under-saving for the ones that aren’t. That’s how a building gets hit with a surprise bill, like a $20,000 roof nobody planned for.

Want to know what your building’s first big bill is going to be? We manage 60+ condo associations across Greater Boston. Book a free 20-min call or call 617-982-0116.