Budget preparation time is upon us! We strongly encourage association managers and Boards to review and ensure that their Capital Reserve Study is accurate and up to date every year around this time. This is one of the most important decisions a board will make for the future of its association. It is an easy and effective way to ensure that your Community’s capital replacement items are properly funded with minimal impact on individual homeowners.
With the recent update to the Capital Reserve Study Standards published by Community Associations Institute and the impact of inflation and supply chain issues over the past few years (in some cases resulting in costs as much as 50% higher for some typical components), it is even more critical to have an updated reserve study to ensure the financial health of your community. To stay on track for a healthy financial future, it is recommended that your Reserve Study be updated every three (3) years.
Why Budget Season Is the Right Time to Review Your Reserve Study
As boards and association managers enter budget season, financial planning takes center stage. This is the time to evaluate not just the following year’s operating expenses, but the long-term capital needs that sustain your community. A Capital Reserve Study serves as the foundation for informed decisions, providing a clear financial roadmap that ensures building systems, amenities and shared assets are maintained adequately without unexpected financial surprises.
By aligning the budgeting process with an updated Reserve Study, your association can avoid underfunding, demonstrate fiscal responsibility to residents and protect property values for years to come.
The Risks of Outdated Reserve Studies
Communities that rely on outdated studies face significant financial uncertainty. Inflation, supply chain challenges and material cost fluctuations can render older projections quickly obsolete. In many cases, boards that defer updates are left unprepared for actual replacement costs, resulting in extensive assessments or emergency loans that burden homeowners.
By contrast, updating your Reserve Study during budget season allows you to incorporate real-time cost data and adjust contribution levels accordingly. This proactive approach minimizes financial risk and builds confidence among residents and stakeholders.
Reserve Study Benefits During Budget Planning
An accurate and current Reserve Study provides:
- Transparency and trust: Residents appreciate knowing that their contributions are being managed responsibly and effectively.
- Regulatory alignment: Many states are strengthening compliance requirements — staying current reduces potential risk.
- Financial clarity: Board members can budget with precision, ensuring adequate funding without overburdening residents.
- Property value protection: Well-maintained amenities, building systems and common areas support higher resale values.
- Capital planning confidence: Boards can schedule large projects with enough lead time to hire qualified contractors and secure competitive pricing.
Falcon’s Expertise in Reserve Planning
At The Falcon Group, our Capital Reserves team combines engineering expertise with financial forecasting to deliver effective solutions. It consists of 6 CAI Certified Reserve Specialists (RS) as well as a Professional Reserve Analyst (PRA) designation awarded by the Association of Professional Analysts. These individuals provide studies that are both technically precise and tailored to each association's needs.
Our process involves:
- Comprehensive inspections of community assets.
- Realistic cost forecasting that considers inflation and market volatility.
- Collaboration with boards and managers to align studies with financial goals.
- Clear, actionable reports that support both day-to-day budgeting and long-term capital planning.
With more than 5,000 Reserve Studies completed, Falcon is a trusted partner for associations looking to enter budget season with confidence.
Stay Ahead This Budget Season
Budget season is not just about balancing next year’s expenses — it’s about securing the long-term financial health of your community. By updating your Capital Reserve Study now, you can make informed decisions, build resident trust and safeguard property values.
The Falcon Group is here to provide the expertise and guidance you need to approach budget season with confidence. Contact us today to schedule your updated Reserve Study and start the new fiscal year with a clear plan for success.
Contact our Reserve Specialists today for a new or updated reserve study!
