Predicting Your Future Reserve Funding? Miss Cleo vs. Reserve Study Companies
- Amber
- Jul 14
- 2 min read
If you watched late-night TV in the early 2000s, you probably remember Miss Cleo, the psychic with the thick Jamaican accent who promised to predict your future. “Call me now!” she’d say.
What does Miss Cleo have to do with HOA Reserve Studies? Simple—both claim to predict the future. The difference? Miss Cleo’s predictions were for entertainment. Reserve Studies, on the other hand, can make or break an HOA’s financial health.
A Reserve Study is supposed to tell an HOA how much money to set aside each year so there’s enough to cover major repairs down the line. It’s like a retirement savings plan but for your building instead of your future self. In theory, if you follow the study’s funding plan, you should be in good shape.
But after analyzing thousands of Reserve Studies, we’ve noticed a pattern—they’re always wrong. And not just randomly wrong—consistently, predictably wrong in the same direction. They overestimate future reserve funding, leaving HOAs thinking they’re financially stable when they’re actually headed for a shortfall.
Take XYZ HOA, for example. In 2019, their Reserve Study predicted they’d be 65% funded by 2025. By 2022, a new study revised that number down to 59%. Now it’s 2025, and their actual reserve funding? A painful 47%. But they followed the plan! So what went wrong?
The problem is that Reserve Studies assume everything will go perfectly—repairs will happen exactly on schedule, costs will stay low, inflation will hold steady, and surprise expenses won’t exist. Reality, of course, has other plans. Things break early. Contractors raise prices. Inflation fluctuates. And unexpected repairs always cost more than anyone guessed.
If a financial advisor got retirement projections this wrong, they’d be out of business. But Reserve Study companies? No consequences. No accountability. Just HOA Boards left scrambling to issue special assessments or jack up dues to make up the difference.
So what’s the solution? We’ve developed an algorithm that adjusts Reserve Projections to better match reality.
Have us review your Reserve Study: