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Maintaining a property is essential to ensure the safety of the people living in it. Most property owners focus only on outside maintenance, like paint and cleanliness. But the monthly maintenance or major repairs and replacement like an elevator, roof, wiring, water tank cleaning, and so much more require extra money. This is where the condo reserve funds help.
A condo reserve fund is like an account that pays for the major repairs of a building when needed, without relying on the building owner. That’s why it is considered to be a critical element of property management considering all the benefits it offers and the longevity of your property. Let’s understand more about its importance.
If you’re living in a building with twenty or more flats, you are most likely to be paying the monthly maintenance charges. The amount differs for every property and is calculated based on the location and the property you’re living in. To manage this, you can use condo reserve funds.
How Is the Condo Reserve Fund Used?
Maintenance can be of any type on any day. So, how do you determine for what maintenance you can use these funds? Property owners can consider any repair, be it fixing a leakage, chopping extra grass, cleaning common areas, or fixing a broken window. All in all, this saving will help maintain the property.
The funds can be used for:
- Structural repairs like fixing a crack in the building, fixing the roof, gate or damaged floor
- Fixing mechanical components like the ventilation system, plumbing or electrical equipment
- Repairing or advancing the amenities like swimming pool, gym, play area, fitness room, and party halls
Benefits of Condo Reserve Funds
The key benefits of condo reserve funds include:
Financial Planning- The property manager can prepare for all future repairs and damages in advance and fix any damage before it turns into a major problem.
Cost Management- Property managers can look for dealers offering better deals for bulk purchases of supplies like taps, pipes, paint, and cement for any future advancements in the property, which will help them avoid paying extra.
Preserve Property Value- A well-maintained property can preserve its value over time. A reserve fund will help maintain any damages and repairs keeping the property looking new and well-maintained.
How to Manage Condo Reserve Funds?
Here’s how you can manage condo reserve funds:
- Ensure that the reserve fund is being funded monthly by setting aside money for regular maintenance and major maintenance separately.
- Keep an eye on the monthly assessment to check if the reserve fund has adequate money for all the fixes considering the age of the property and plans to improve it.
- Plan a budget for the future. Though the money may not be used now, it’s a good thing to keep it funded with enough money for future repairs and replacements.
- The property owner should set policies on how the funds should be used, when it should be approved and ensure that the funds are being used as per the laws.
We hope the information has given you a good insight into the importance of condo reserve funds for property management and how it can save on future expenditures. It is the most important part of managing the condo, while maintaining future construction project management that will ensure the property is well-positioned and preserved.