Seven Tips to Finding the Right Reserve Study Firm
Download our guide, Building to Last: A Blueprint for Success.
An experienced firm will be able to identify critical repairs, poorly executed projects, provide various options to complete projects, improve safety and efficiency as well as evaluate energy use. Only a solid preventative maintenance program as enacted by a good management company can help you to realize the full useful life of many of your most expensive components. And this helps to mitigate your current and future funding requirements.
As you can see, there is a lot that goes into creating these vital guides for your association, which is why partnering with the right reserve study firm is critical. Here are some tips to help you find a reserve study firm.
1. Do some background work.First of all, any prospective firm you work with will want to know details about your association. Gather information about your association and develop a complete description of it. You will need details like location, number of units, description of buildings, list of amenities, etc. Reserves however don’t have to be relegated to the state-mandated minimums; the board can add projects and components as part of their financial planning discussion. And this should be supported by their 3 or 5 year business plan, which a good management company will help you develop.
2. Find your firm.Searching for candidates is the easy part. Good property management companies will maintain a list of qualified firms. You can also check with your local chapter of the Community Associations Institute or go to caionline.org.
3. Ask the right questions.Decide what criteria you’ll be using to evaluate your candidates. Reserve studies may be legally funded through the strait line method and the pooled method. Make sure your reserve study professional provides you with both method calculations. Identifying the most important factors when it comes to hiring a firm for your association will help you whittle down the candidates. You will have a more clear picture of the end product by asking questions such as number of years in business, number of studies performed per year, company background, specific experience with communities like yours, funding methods, pricing methods, time it takes to complete the work, association involvement and types of guarantees.
4. Make contact.Reach out to your candidate firms with a request for standard informational material, such as examples of previous reports. Then ask the questions you developed earlier, carefully recording the answers. Selecting a study provider who is engaged in a multi-year agreement is recommended. It allows the chosen provider to update the study annually with various cost increases and keep you current in the market while reducing the expense commissioning an entirely new reserve study every year. As you interview more firms, you may find that your questions evolve as well. Don’t forget to request three references.
5. Compare.Once your research is done; now it’s time to make your comparison matrix. Here’s a simple suggestion: make a spreadsheet that lists your hiring criteria in the left-hand column, then list your candidate firms across the top, horizontally. After that, use your research to fill in the boxes. When your matrix is complete, eliminate those that don’t meet your most basic requirements. The rest are up for evaluation. At this time, you’ll also want your accountant to review the sample reports your candidates provided.
6. Reach out to references.Contacting the remaining firms’ references should involve brief conversations. Ask simple questions such as whether the association was pleased with the firm’s work, whether their association is similar to yours, when the study was performed, if cost expectations were met, if the study was delivered on time, if there was something they wished the firm had done differently, whether they considered hiring other firms, what factors they used in choosing this firm, and whether or not they’d hire them again. Keep the list of questions to a maximum of 10. Be efficient, friendly and respectful of their time.
7. Decision time.You’ve identified candidates. You’ve interviewed them and eliminated the non-contenders. You’ve developed a candidate matrix. And you’ve reached out to their references. Now you have all the tools you need to make an informed decision.
Partnering with a reserve study firm can have a huge impact on the future of your association. Be aware that reserves are only calculated for the replacement of short-lived building or site components. This includes components that require replacement prior to the overall estimated end life of the buildings or structures. These reports are designed to provide reasonable, appropriate budgetary cost and useful life data based on market standards. Follow these steps and you’re sure to find yourself working with a quality firm that meets your expectations. For more help, contact FirstService Residential.