Co-op reserve per unit
Started by Isle_of_Lucy
about 14 years ago
Posts: 342
Member since: Apr 2011
Discussion about
What's a reasonable reserve per co-op unit? I've heard everything from $2,000 to $7,000. Is there a reasonable range out of the red flag zone?
At least 6 months of coop operating expenses should be held in reserve -- this is a minimum. If large capital expenses are upcoming that will be paid for from the reserve fund, then the fund ideally should be plumped up prior to the expenses being charged to it.
Shouldn't the reserves be in proportion to the sizes of the units?
(For the record, my building, which is not in NYC, has the equivalent of $600k in reserve for 27 units, all roughly the same size, at year 41 of an expected structure life of 60 years.)
You can't do a per/unit on average analysis because building expenses vary wildly. Two different coops in my neighborhood each have three separate entrances that are staffed but relatively few coop units within each building. Another building has a staff of about 8 with 140 units. Another coop has a staff of 8 with 40 units. These will all have wildly different operating budgets.
Then there may be two identical coops with very different debt profiles. One may have a mortgage of $6MM and another only $1MM. Their reserves would not have to be the same.
And let's not forget the structure and mechanics that vary from building to building. One building may have premium windows that last for 100 years -- another may be facing a major window replacement. One building may have better (but more expensive to maintain) elevators than the next. Then there's the heating system. Electrical system. Laundry rooms. The list is endless.