"1. The Financial "Stress Test" (Reserve Study & Budget) The Reserve Study is the most critical document for predicting future costs. Funding Ratio: Check the "percent funded" in the reserve study. Experts typically look for 70% or higher; a ratio below 30% is a major red flag for upcoming special assessments. Dues Trends: Compare current condo fees to the last 2-3 years. Consistently low fees that don't increase with inflation often indicate deferred maintenance that you will eventually pay for."
"2. The "Inside Scoop" (Meeting Minutes) Read the last 12-24 months of meeting minutes to find issues not listed in the formal prospectus. Recurring Problems: Watch for mentions of leaks, elevator breakdowns, or security issues that appear in multiple months without resolution. Pending Assessments: Look for "motions" to gather bids for major work like roofing or siding. This often precedes a special assessment (a large one-time fee)."
Evaluate the reserve study and budget as the primary indicators of future capital needs and financial resilience. Target a reserve funding ratio of around 70% or higher; ratios below 30% signal likely special assessments. Compare condo dues over the past two to three years for inflation-adjusted trends and inspect accounts receivable for delinquency rates above 15%. Read 12–24 months of meeting minutes to spot recurring maintenance issues, pending motions that signal upcoming assessments, and whether the board proactively addresses repairs. Review rules and regulations for rental caps and other lifestyle restrictions that can affect rental income and resale value.
Read at Boston Condos For Sale Ford Realty
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