IREM Certified Property Manager (CPM) Practice Test 2026 - Free CPM Practice Questions and Study Guide

When assessing the financial health of Common Interest Developments (CIDs), it is essential to consider the context beyond just the percentage funded. The percentage funded can provide a snapshot of the reserves relative to the future capital needs, but it does not tell the whole story. Other factors such as the age of the development, maintenance needs, overall financial management, long-term plans, and the economic environment play a significant role in the overall financial stability of the CID.

For example, a CID that is 60% funded may appear less favorable than one that is 40% funded at first glance; however, if the 40% funded development is in a strategically sound position with fewer immediate needs for large capital expenditures, it may be financially healthier in the long run. Therefore, taking a holistic view allows property managers and stakeholders to make informed decisions that reflect the actual financial health of the development rather than relying solely on a single metric.