Using the reserves calculator is a great way to zero in on an appropriate number for the reserves account. It can be an eye opener as you enter replacement costs and remaining economic life to various components of the building - especially on an older building that is nearing the end of its useful economic life.
You can enter any component description you wish, and any remaining economic life term that you like - then enter the replacement cost and the model will calculate the reserve amount required to cover this cost.
 Component Description
Enter the description of the component here.
|
|
 Remaining Economic Life
Enter the remaining economic life of the component here.
|
|
 Projected Replacement Cost
Enter the estimated replacement cost for the component here. If the component has a long term remaining economic life, you may want to consider increasing the replacement value to reflect the effects inflation.
|
|
 Reserve Amount
This is a calculated amount and requires no entry. This is the amount required on a dollar basis to reserve each year for this component's replacement.
|
|
 Reserves in $/sf
This calculated amount requires no entry, and is the amount needed on a per-foot basis annually to replace this asset in 9 years (see example)
|
|
 Totals
These are calculated amounts and require no entry. These are the summary totals for the reserve account,
|
|
