Holding costs are the recurring expenses of owning a property during a flip, rehab, or vacancy: loan interest or payments, property taxes, insurance, utilities, lawn and upkeep, HOA dues, and site services. They accrue monthly whether work happens or not, which makes the project schedule a financial variable — every extra month of hold spends these costs again. Flippers estimate them as a monthly burn rate and re-forecast whenever the timeline slips.
The formula / structureMonthly Holding Cost = Loan cost + Taxes + Insurance + Utilities + Upkeep + Other recurring items
Holding Costs: a worked example
Worked example. Interest $650 + taxes $310 + vacant-property insurance $145 + utilities $190 + lawn $120 + misc. $60 = $1,475/mo. A planned 5-month hold costs $7,375; a slipped 7-month hold costs $10,325. The $2,950 difference comes straight out of profit.
What affects Holding Costs
- Timeline — the multiplier on every line
- Financing cost and structure
- Property tax load and insurance type (vacant/renovation policies cost more)
- Season — utility and sale-timing effects
Get the Comping Checklist — free.
The 14-point checklist we run on every property before a number leaves our mouths.