Real Estate Values & Reserves

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By Johannes Koerm, RS
Association Reserves, Inc.
October 2013

It is no secret to anyone in the Community Association industry that the fiscal health of any association is directly linked to their property values and the perception of desirability of their units.  Many communities struggle with this concept and downplay its significance.  The fact is that reserve fund strength does increase property values.  Why is this the case?  Strong reserves mean that an association’s board prioritizes the best interests of the association, and its residents.  Projects get done on time, with no deferred maintenance, which leads to owners being able to live in a clean, attractive and desirable community.

In the world of real estate, when properties go on sale, curb appeal will always win.  By keeping up with reserves and by maintaining an association well, the desirability factor goes up.  When that increases, so does demand and along with it, price!  Potential buyers want a beautiful place to call home and they want to buy into an association where people care about the property and the risk of special assessments is low.

Would you want to live in a poorly maintained Association, with a high chance of a special assessment?  Of course not and neither does anyone else.  By making our Reserve fund and common area maintenance a priority, everybody wins.  At a time when market values are finally beginning to show signs of life, now is the time to maximize your investment.

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