Holding Costs, also known as carrying costs, are the monthly costs you incur while you own the property: property taxes, insurance, utilities and maintenance.
Total Holding Costs = Holding Period in months × Monthly Holding Costs
The holding period
The holding period is your rehab timeline plus your sales timeline. Both are entered separately and added together.
Three ways to enter them
Lump Sum. A single figure. Note that with lump sum, changing the holding period does not change the total.
$ per Month. Multiplied by the total timeline. $750 per month over 6 months is $4,500.
Detailed. An itemized list entered as monthly or annual amounts, converted to a monthly figure and multiplied by the timeline.
Typical holding costs
Property taxes, which vary by local rates. Check your county assessor's site.
Property insurance, $100 to $150 per month for vacant property coverage.
Utilities, $200 to $350 per month depending on season.
Maintenance, $50 to $100 per month for lawn care or snow removal.
HOA dues, if the property has an association.
How long does a rehab take?
Planning, permits and bidding run 1 week to 1 month or more. Construction runs 2 weeks for a cosmetic rehab up to 4 months for a gut job. Listing takes 1 week to 2 months. Closing takes 30 to 60 days.
The average rehab takes around 4 to 5 months.
Read the full article: What are Holding Costs?