Condo Reserve Adequacy Calculator

Condo reserves protect owners from special assessment shocks.

Current reserve balance

Projected 30-yr capex

Annual contribution

Years forward

Investment return %

Adequacy ratio

2.3%

Projected balance

$4,504,718

Reserve gap

How the math works

Projected = current × (1+r)^years + annual × annuity growth. Pro-rata need = total × (years/30). Adequacy = balance ÷ need.

$500k × 1.04^15 + $180k × FV annuity = $900k + $3.6M = $4.5M vs need $2M (15 yr pro-rata). 225% adequate.

How to Use

Enter current reserve balance.
Enter projected major capex (30 years).
Enter annual reserve contribution.
Enter years forward.
Enter expected investment return %.
Read adequacy ratio.

Frequently Asked Questions

Why does condo reserve matter?

Reserve funds capital repairs (roof, facade, elevators, plumbing, electrical). Without adequate reserve, owners face special assessments ($10k-100k+ per unit). Under-reserved condos see: market value discount 10-30%, harder financing (lenders scrutinize), HOA failures. Florida Surfside collapse (2021) intensified reserve requirements nationally. Most states now require reserve studies and minimum funding.

What's 'adequate'?

Reserve adequacy ratio = reserve balance ÷ projected 30-year capital needs. Below 30%: severely underfunded. 30-60%: underfunded. 60-100%: adequate. 100%+: fully funded. National average: 45-55% (historically underfunded). Post-Surfside trend: 70%+ target. Institutional buyers (REITs, condo converters) increasingly scrutinize reserve before acquisition.

Reserve contribution levels?

Healthy: $300-600 per unit per month. Underfunded: $100-250. Aging buildings: $600-1,500. High-rise with significant facade/envelope: $800-2,000. Buildings over 40 years old: often need 2-3x younger building contribution. HOA board must balance current-owner pain vs long-term solvency. Most boards procrastinate, leading to special assessment shocks.

Reserve study?

Professional analysis of major capital components, expected lifespan, replacement cost, inflation-adjusted. Updated every 3-5 years. Cost: $5-15k depending on building complexity. Florida now requires every 10 years. CA, NY recommend or require. Use findings to set contribution levels. Reserve study professional: APRA (Association of Professional Reserve Analysts). 500+ certified analysts nationally.