Do HOA Reserve Amounts Affect Property Values?

Do HOA Reserve Amounts Affect Property Values?

Adrian J. Adams, Esq., Founder & Managing Partner of ADAMS | STIRLING PLCI recently spoke at an event with the founder of Association Reserves, Robert Nordlund about the subject of HOA reserve amounts and their possible affects on property values.  Here is what he found out below:

HOA Reserve Amounts and Your Property Value

“He mentioned a study he recently completed to see if property values were affected by the strength of an association’s financial reserves.

He compared the sales price (measured in price per square foot) of units in 100 comparable condominium associations to the their reserve fund strength (measured in % funded).

He found that market values were 12.6% higher in associations with strong reserves (over 70% funded) than in associations with weak reserves (under 30% funded).

I took out my calculator and did the math. If you own a $300,000 condo in an association with weak reserves and persuaded your board to build strong reserves, your property value increases by $37,800. Building reserves is like putting money in your own piggy bank.

I always had a sense that healthy reserves had a positive effect on property values. Kudos to Robert Nordlund for quantifying it.”

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