Tips On How An NJ Reserve Study Is Conducted

1. Tips On How An NJ Reserve Study Is Conducted Brought to you by: http://www.lockatong.com/

2. An NJ reserve study is a very important tool for community associations. It is used for planning for long term repair as well as replacement needs of the common area elements. Many community associations use it to forecast funding needs for repairs, replacements and capital improvements that they intend to do in future. • That information is used for calculating the amount of money that the associations are required to save in their reserve fund on an ongoing basis so as to be able to fund those projects when the time comes.  Tips On How An NJ Reserve Study Is Conducted www.lockatong.com

3. So what is an NJ reserve study comprised of? The reserve study is supposed to include all major common area elements of a building. The limited components and other components are usually excluded because it is not the responsibility of the association to pay for their repairs. • Among the common area elements that are usually analyzed include the roof, balconies, facades, windows, sidewalks that are owned by the association, mechanical systems, parking garages, elevators, electrical systems such as fire alarms and so on, and domestic hot water heaters. The ongoing repair of these components is accounted for in the operating budget of the association as opposed to their reserve fund.  Tips On How An NJ Reserve Study Is Conducted www.lockatong.com

4. Every component that the reserve study NJ includes is properly evaluated in order to determine the remaining service life as well as the cost for repairing or replacing it. The costs are then tabulated while keeping in mind the estimated inflation so as to give the association a schedule that indicates the money that is needed to pay for them. • After the funds that are required to pay for capital projects and long term repairs have been determined, the amount of money that should be kept in the reserve for paying for those projects funds is calculated.  Tips On How An NJ Reserve Study Is Conducted www.lockatong.com

5. It is very important for inflation to be considered when the estimated repair and replacement costs are being calculated. For instance, if a repair would cost $20,000 in 2016, it is going to cost significantly more in the years to come because of inflation. • Another thing that a reserve analyst needs to take into account when doing calculations of the estimate repair and replacement costs is the interest earnings on the money that the association will be depositing or saving in the reserve fund.  Tips On How An NJ Reserve Study Is Conducted www.lockatong.com

6. There are quite a number of things that affect the reliability of an NJ reserve study, one of them being the accuracy of the remaining useful life of every area component that will be covered during the study. If the useful life is not estimated properly, then there might be conflicts in the amount of money that will be required to fund their repairs. • Other factors that affect the reliability of the study include accuracy of estimated repair cost, accuracy of the interest rates that the association will earn on its reserve funds, and the accuracy of the estimated inflation rate. Even though achieving high accuracy of each factor can be really difficult, large inaccuracies should be avoided because they can cause the reserve study to fall short of providing adequate funding for the future needs of the associations.  Tips On How An NJ Reserve Study Is Conducted www.lockatong.com

7. For more information on how an NJ reserve study is conducted, visit us today at www.lockatong.com.  Tips On How An NJ Reserve Study Is Conducted www.lockatong.com

8. Tips On How An NJ Reserve Study Is Conducted Brought to you by: http://www.lockatong.com/