Good Morning Serious Homeowners!

In Today’s Newsletter:

• So, where do your Association Assessments go?

• The tool I use weekly

• July Maintenance Reminders

Have You Heard of GARVEE?

The most loved one-stop shop for families and businesses across the U.S., raising the bar in retail and redefining affordable quality. Check it out here, and take $25 off:

Is Your Condo or Homeowners Association Draining Your Wallet?

Where Does Your Assessment Actually Go?

Every month you send your association a check. Every month, a reasonable question follows: what am I paying for?

Associations are a fantastic way to gain economies of scale on property upkeep, minimize unit owner’s responsibilities, and live in a well-kept community!

The answer is simpler than most owners expect. Your regular assessment gets split into two buckets — operating expenses and the reserve fund. Every dollar lands in one or the other.

Bucket 1: Operating Expenses

This is the cost of running the property this year. These are recurring, predictable, and consumed as you go. These are the bills that show up whether or not anything breaks.

Typical operating costs include:

• Insurance — the master policy covering common elements and association liability. This is often the single largest line item, and premiums have climbed sharply in recent years.

• Utilities — water and sewer, common-area electricity, gas, trash removal, and sometimes bulk internet or cable.

• Landscaping and snow removal — mowing, irrigation, plowing, salting.

• Janitorial and building maintenance — cleaning, light bulbs, filters, minor repairs.

• Contracted services — elevator maintenance, fire alarm and sprinkler testing, pest control, pool service, security.

• Management fees — the property management company, if you have one.

• Professional fees — accounting, tax preparation, audit or review, legal counsel.

• Administrative — banking fees, software, mailings, board expenses.

Operating money is meant to be spent. A well-run association ends the year roughly at breakeven here, not sitting on a large surplus. Usually, a very diligent effort might be able to save just a few percent of costs in the operating budget.

Bucket 2: The Reserve Fund

Reserves are savings for the big-ticket components that wear out on a long cycle of years. Every month, a portion of your assessment is set aside so the money exists when the roof reaches the end of its life — instead of arriving as a surprise bill.

Reserves typically cover:

• Roofing — 20–25 year replacement cycles

• Asphalt and Concrete Paving — parking lots, driveways, walkways

• Building envelope — siding, masonry and tuckpointing, windows, balconies, decks

• Mechanical systems — boilers, chillers, HVAC, elevators

• Plumbing and electrical — risers, main lines, panels

• Amenities — pool resurfacing, clubhouse interiors, fitness equipment

• Common-area finishes — hallway carpet, paint, lighting

How much should be in there? That's what a reserve study answers. A professional inspects each major component, estimates its remaining life and replacement cost, and produces a reserve funding plan. Most associations should refresh theirs every three to five years.

Why the Split Matters?

Underfunded reserves are the leading cause of association special assessments — the surprise five-figure bill nobody budgeted for. When the money isn't saved, the association's only options are a special assessment, a loan (which owners repay with interest), or deferring the work until it costs more.

There's no free lunch here. An association with unusually low monthly assessments is often just deferring the bill, with interest.

What to Look For?

Ask your board for three documents: the current operating budget, the most recent reserve study, and the percent funded figure. Below 30% funded is generally considered weak; above 70% is strong.

Reserve requirements and disclosure rules vary significantly by state, so check what applies where you live.

Your assessment isn't a fee. It's your share of owning a building — the part you pay now, and the part you pay forward.

Tell us what you think about your association or assessments: [email protected]

Every homeowner you know needs this newsletter. Send KnowYourHome to one friend and we'll email you the KnowYourHome Annual Maintenance Calendar — the one page that tells you exactly what your house needs, every month of the year.

Refer 1 friend → get the calendar.

Also - Your friend will receive our completely free “Guide to Hiring Painting Contractors” when they sign up.

Home Tool Picks - Pruners

I literally use a branch pruner every week. This is a must have home tool.

Frankly, I probably need new ones. You want these to be SHARP!

Check them out:

July Maintenance Reminders

See the links for awesome vides of each!

1. Check, Change or Clean Your Furnace Filter

2. Test Smoke, Fire and Carbon Monoxide Detectors.

3. Run Garbage Disposal

4. Clear Sticks From The Yard

5. Run Cleaning Cycle on Dishwasher and Clothes washer

Home Consulting Service

Adam Rich a licensed Professional Engineer (P.E.) and Real Estate Salesperson in the state of Ohio. Adam helps discerning homeowners like you take control of the complexity behind your home.

Could you use un-biased advise about?

1. Home Improvements

2. Home maintenance

3. New construction decisions and options

4. Real estate investing or purchases

5. Real estate engineering matters

6. Home systems matters

7. Major renovations

8. Systems upgrades

9. Long-term maintenance

10. Your home’s true condition

I deliver expert-level answers in clear, practical language.

Choose one-time consultation or an ongoing relationship.

I offer homeowners peace of mind through clear insights, practical planning, and calm expertise.

The content of this newsletter is for informational purposes only and does not constitute professional advice. Some of the links included in this newsletter are affiliate links, meaning I may earn a commission if you make a purchase through these links. Always perform your own due diligence before making any financial decisions.