Renovation fund: definition
The renovation fund (or reserve fund) is a shared pool that co-owners contribute to each year to finance major upcoming works (façade, roof, lift, etc.) in a condominium (PPE).
Renovation fund at a glance
This mechanism avoids overly steep cash calls by spreading major costs over the long term. The fund’s level shows whether the condominium is properly planning for major maintenance or whether catch-up contributions will be needed.
A simple example of a renovation fund in a condominium
For example, in a 20-unit PPE (condominium), a reserve fund of only CHF 20,000 when the roof must be replaced soon is a warning sign: higher charges or a significant cash call is likely to occur.
Resources related to the renovation fund
- Renovation funds in buy-to-let investing
- Rental yield calculation
- Tips for buying property
