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Reserve True Up Calculator

Reserves collected rarely match actual spend. This calculator sizes the gap.

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Ending balance

$125,000

Annual reserve gap

-$45,000

Total period gap

-$225,000

How the math works

Opening balance + (collected − spent) × years = ending. Negative = under-reserving.

Reserve balance heading negative by year 3-4 is a clear signal to review the replacement reserve study. Many owners run deferred maintenance through ops expense instead, which hides the true gap from both tenants and lenders.

How to Use

  1. Enter reserves collected annual.
  2. Enter actual capital spend annual.
  3. Enter reserve balance forward.
  4. Enter period years.
  5. Read true-up position.

Frequently Asked Questions

Why true-up?

Reserves collect systematically (monthly budget); spend lumpy (roof year 12, HVAC year 8). Cumulative balance swings. Lender covenants and owner reporting require tracking. Large gaps signal under-reserving or capital deferral.

Under-reserved signal?

Balance dropping year over year despite collections = under-collecting. Trends toward negative signal capital catch-up coming. Budget increase or additional capital call likely. Senior lender may require reserve bump at refinance.

Over-reserved?

Balance climbing indicates tenant over-charged or capital underspent. Tenant audits can reclaim over-collection. Landlord should reduce prospective rate or spend down balance on deferred items. Either move protects audit exposure.

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