A reserve study is a vital capital planning tool for HOAs and condominium associations that provides directional guidance and an in-depth analysis of community assets. The initial reserve study requires an onsite inspection and thorough examination of the reserve fund status to establish a prioritized schedule of capital improvement projects and a reserve funding plan to pay for them over the next 30-years. Less rigorous or meticulous reserve study updates — conducted every 3-to-5-years — are also important for helping associations to maintain an accurate forecast of future expenditures and to ensure adequate reserve funds.

Without a reserve study on hand, an HOA is flying blind into its future. To set its course, the HOA has a fiduciary responsibility to hire an independent reserve study company to do this important work and to leave behind a well documented plan that benefits current and future boards. Property managers come and go; board members frequently change, and the existing reserve study is there to help new decision makers understand the logic or reasoning behind earlier choices. A professional reserve study company will be available to discuss its work, the methodology used, and considerations that went into the study years after it was conducted. Additionally, reserve study specialists can support HOA boards by providing periodic updates to the original reserve study, ensuring the association remains on track.

For an association, having a reserve study is like having an investment strategy: you set aside funds today to cover future expenses. Success is dependent on understanding long-term expenditures and your ability to fund them through reserves.

^{From https://www.reserveadvisors.com/resources/blog/what-is-a-reserve-study-and-why-is-it-important/}