Reserve Studies going bonkers

[Jeff S.]

As everybody has noticed the increase in materials and labor has skyrocketed which has thrown a wrench into condominium reserve studies. Since reserve studies attempt to forecast replacement costs of items over a 30 year period they are having to recalibrate since the reserves they are now using did not use the latest increase in construction costs. This is not a lot different than the problems syndicators have had. 

Dues increases and/or special assessments will be part of the deal going forward. I feel for these older folks on fixed incomes where large increases back to back are painful. And investors can get hurt if you love condos.