Real properties are undeniably high-valued assets. However, it is not a guarantee that a real property’s value will appreciate especially if it is not kept in an excellent state and it lacks good maintenance. Businesses, institutions, and governments most importantly have the responsibility to prioritize the upkeep of such properties not only to exercise safety of the occupants but also to ensure a positive market in the event the properties are to be sold or disposed of in the future.
However, property maintenance is not as easy as ABC. There has to be a dedicated plan of action in case events take place. More importantly, there has to be a team that is always ready to monitor the upkeep on a regular basis. Here is where a reserve study is necessary.
A reserve study has all the records about a particular property’s repair, replacement, or renovation needs. Everything from the interior, to exterior fixtures and structures of a property, is being checked and the results are included in the reserve study report. This will then serve as the basis for schedules and plans of action in the future.
Importance of a Reserve Study
A reserve study is defined as a detailed and systematic way of assessing and identifying the current state of a property. It can be conducted for any type of property be it a hotel, a resort, school buildings, gymnasiums, apartments, high rise buildings, and even houses for as long as the property owner wills it for the sake of protecting it.
Whatever judgments and decisions on the property and its maintenance are best made in light of the property’s reserve study since its result will bear all the important details, including facts and analysis. For instance, a newly built apartment will surely demand less in terms of repairs and maintenance when compared to the older ones but when is the best time for its first repair?
Reserve study takes care of the regular maintenance and timely solution to minor property issues. Although it is costly, it has been proven to be less expensive when compared to managing full-blown property problems. Hence, without any question, for guaranteed protection of a property that can help increase its value, a reserve study is best carried out.
Components of a Reserve Study
Reserve study’s output is a comprehensive report that bears all the important information about the property’s upkeep and management. A reserve study report is composed of the following:
- Property’s Components
This clause itemizes all the components of the property and classifies them according to their respective categories, e.g. design or aesthetic, structural, or functional. The last part is where plumbing and electrical wiring reports belong. For each of the components, materials present are clearly indicated including their assessed status or integrity level like how long it is likely going to last. For instance, in insulations and walls component, it will be indicated whether they are made up of concrete, wood, or other materials, and their status as mentioned above.
- The Lifespan of the Itemized Components
This lifespan shall be calculated based on the number of people using or staying on it. This part of the study justifies that a school building used five to six times a day will likely need to have more repair and maintenance needs than a church that is only full during Sundays.
- The Repair and Maintenance Cost
This part will detail the costs that will be incurred in the property repair and maintenance. Moreover, a forecast about possible sources of the fund will also be added in this part.
Cost of a Reserve Study
Since only skilled professionals are authorized to do a reserve study, they do not come cheap. However, a lot of property experts have been vocal about how great reserve studies are as an investment to a property.
A reserve study goes through a thorough, detailed process. Hence, it is oftentimes not a one-man job but rather involves a team of professionals conducting the property evaluation and assessment, another team working on the report formulation and documentation, and another team presenting the study’s findings to the stakeholders.
The study’s report shall include visual presentations like tables and graphs but does not indicate how such results have been arrived at unless a full, comprehensive reserve study has been stipulated in the contract.
Then again, although reserve study comes with a hefty price tag, to best protect your property and ensure its continuous value appraisal, it is the best solution you can get.
Choosing a Reserve Study Company
Although reserve study is a term only common in the vocabulary of some property owners, you will be surprised at the number of results Google will suggest as soon as you search for the best reserve study firm in town. In this digital age, however, false advertising is already rampant. To be safe, it is best if you go for the firm that truly gained your trust. You have to research your options. Do a check on the feedbacks and reviews about them online. However, in doing this, make sure to rely on feedbacks and reviews outside the firm’s website to ensure an unbiased input.
Another way to choose reliably is by asking for referrals from the firm’s previous clients and see if they are indeed satisfied with the firm’s output or otherwise. Since this is going to be a pricy investment, you have to make sure the firm you will entrust the job with is truly deserving of it.
Now, as soon as you have gathered your list of options, pick your top three and right away, schedule a consultation with each of them. This way, you will be able to see for yourself which among them is the most promising. While inquiring, make sure to ask about their track record or experience as this will give you a clue about their quality of work. Of course, if they are good, they probably have mined a lot of famous clients already. Lastly, see to it that your best interests are guaranteed at hand and they are willing to include you throughout the study to keep you on track especially financially wise.