Condo Q&A

How does HOA calculate reserve needs? Is there a formula?

Written by stephen polinsky | Fri, Feb 11, 2011 @ 01:55 PM
How do you calculate the amount the HOA needs to have in reserve? We are a relatively new building with 8 units and when we bought our condo our HOA fees included a management company. All of us decided to self manage, but the board wanted to keep our HOA fees the same so we could build up our reserves. We all agreed to this, but over a year has gone by and we are still paying the same HOA fees. I believe we should have a healthy reserve for our safety and for re-sale purposes, but not too much that we pay for future owners issues. Is there a formula to know what is a healthy reserve amount?