Finding the best HOA reserve study companies: What to know

What is an HOA reserve study company?

An HOA reserve study company is a professional firm that helps homeowners associations plan for long-term maintenance and repair costs. They evaluate shared property components like roofs, elevators, roads, and pools to estimate how long they’ll last and how much it will cost to replace or fix them.

Using that data, the company creates a reserve study, which recommends how much money the HOA should set aside each year in a reserve fund. Learn more about reserve planning in our guide to HOA reserve rules of thumb.
 

What an HOA reserve study company does

A reserve study company typically helps an association by:

• Inspecting major common-area components such as roofs, paving, exterior elements, amenities, mechanical systems, and other shared assets.
   
• Estimating the useful life, remaining useful life, and replacement cost of those components.
   
• Preparing a funding plan that shows how the association may build or adjust HOA reserves over time.
   
• Recommending reserve contribution levels based on the study’s assumptions and methodology to help avoid special assessments.
   
• Updating prior studies so the board can compare changing conditions, prices, and reserve needs.
   
• Giving the board a report it can use for budgeting, owner communication, and long-term planning.

Tips for finding the right HOA reserve study company

Reserve studies can get a little complex. Thankfully, you don’t have to be a fortune teller to read the future of your association... you simply need a good reserve study firm to help. Here’s how you can find the right firm for your community.

1. Do some homework

   First of all, any prospective firm you work with will want to know all about your community association. Collect information on your association and develop a detailed profile of it. You will need information such as location, number of units, description of buildings, list of amenities, HOA fees paid, etc.
    

2. Gather a list of possible firms

   Searching for candidates is easy. Good HOA management companies 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 thorough questions

   Decide what matters most to your association in evaluating potential firms. You will get a clearer picture of the firm and what it can do for your association by asking questions about their number of years in business, number of studies performed per year, company background, the firm’s experience with communities similar to yours, funding methods, pricing structure, time it takes to complete the work, needed involvement from the association, and types of guarantees.
   
   Identifying the most important factors when it comes to hiring a firm for your association will help you evaluate the candidates.

   "If boards want to drill down on specific information to ask the reserve study firms, then their FirstService Residential partners can help with that. It is another way we can add value to the communities we serve."
   
   Brian Pinkham, vice president at FirstService Residential in North Carolina

4. Look for recognized credentials

   When comparing HOA reserve study companies, look at their qualifications. CAI’s Reserve Specialist (RS) designation and APRA’s Professional Reserve Analyst (PRA) credential are two of the most recognized reserve study credentials in the industry. They do not guarantee the perfect fit on their own, but they are a strong first screen when a board is building a shortlist.
    

5. Ask for information

   Reach out to your candidate firms with a request for standard informational material, such as examples of previous reports. After reviewing the material the firm sends you, ask the questions you developed earlier, carefully recording the answers they give you.
   
   As you interview more firms, you may find that your questions evolve as well; it’s okay to circle back to earlier interviewees if you want to get any additional information as you develop new questions. Don’t forget to request three references.
    

6. Compare

   Your research is done; now it’s time to compare the firms you interviewed. Here’s a simple suggestion for making a comparison matrix: create a spreadsheet that lists your hiring criteria in the left-hand column; list your candidate firms across the column headers.
   
   After that, use your research to fill in the boxes with which firms fulfill which trait. At this time, ask your accountant to review the sample reports your candidates provided to confirm that they meet your federal filing needs. When your matrix is complete, eliminate those that don’t meet your most basic requirements. The rest are up for evaluation.
    

7. Check the references

   Contacting the remaining firms’ references should involve brief conversations of about 10 questions. Ask whether the association was happy with the firm’s work, how similar the association is to yours, when the study was done, how cost estimates compared to actuals, if the evaluation 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 the firm again. Be efficient, friendly, and respectful of their time.
    

8. Make the call

   It’s down to the wire. You’ve identified candidates. You’ve interviewed them and eliminated the non-contenders. You’ve evaluated them via a candidate matrix, and you’ve spoken to their references. Now you have all the information and tools to make an informed decision.

Partnering with a quality reserve study firm can have a huge impact on the future of your association and its finances. Follow the steps outlined above and you’re going to find yourself working with the right firm, one that meets your expectations.

For more help in finding a reserve study firm, contact FirstService Residential, North Carolina’s leading property management company.

This information is provided for general informational purposes only and is not intended to constitute, and should not be relied upon as, legal, regulatory, financial, or operational advice, or as a representation or guarantee of any specific services, capabilities, or outcomes. Property management needs, regulatory requirements, market conditions, and available services vary by jurisdiction, property type, and community. FirstService Residential provides services through locally based affiliates and associates, and services and results may vary by community, region, contractual terms, and applicable law.