Guide
Flip holding costs
Team RE Underwrite Lab
What holding costs are
Holding costs are the bills that run while you own the house and before you sell it. Property taxes, insurance, utilities, HOA dues, and a miscellaneous monthly line are the usual stack. Loan interest is related, and it is worth keeping as its own line so a rate change does not hide inside the utility guess.
RE Underwrite Lab does not look up the tax bill or the insurance quote. You type the figures. The fix and flip calculator spreads annual taxes and insurance across the hold and adds the monthly utilities.
Formula
Monthly holding, before interest, is annual taxes divided by 12, plus annual insurance divided by 12, plus utilities, plus HOA, plus any other monthly bill. Holding cost for the project is that monthly figure times the months you hold.
Interest on an interest-only loan is loan amount times the annual rate, divided by 12, times the same months. Add that to the holding stack if you want the full carry. Do not add principal. Principal comes back when you sell, or it stays owed if you do not.
Example
Illustrative example. Annual taxes of $3,120 are $260 a month. Annual insurance of $1,680 is $140 a month. Utilities are $210 a month and HOA dues are $75 a month. The stack is $685 a month. Over 7 months that is $4,795 before interest. These figures are made up so the addition is visible. They are not a tax bill or an insurance quote.
An interest-only loan of $210,000 at 11% costs $1,925 a month, which is $13,475 over those 7 months. Carry including that interest is $18,270. The hard-money page is where a different rate, points, and term are divided. This sketch does not include points.
Common pitfalls
Typing the annual tax bill into a monthly field, or forgetting to divide by 12, makes the hold look twelve times too expensive. The formula above divides annual taxes and insurance first.
A hold that matches the contractor's best week, not the week the house can actually list, drops months of interest and utilities off the profit. Change the months when the schedule changes. The stack does not stop because the calendar was hopeful.
Steps
List each monthly line
Turn annual taxes and insurance into months, then add utilities, HOA, and any other bill you pay while you own the house.
Multiply by the hold
That monthly stack times the months you expect to own the house is the holding cost before loan interest.
Add interest separately
Interest-only loan cost is a different line. Add it after the tax and utility stack so the two are not mixed.
Questions
Do holding costs include the rehab draws?
No. Draws are part of the loan or the cash you spend on work. Holding costs are the bills for owning the house during the hold.
Should utilities stay on during a vacant rehab?
If the contractor needs power and water, those bills are part of the hold. A zero utility line assumes they are off, which is a choice you type, not a fact the page checks.
Where do agent commissions sit?
Selling costs are a percent of after-repair value on the fix and flip calculator. They are not a monthly holding line.
Is the 7-month sketch a recommended hold?
No. Seven months is there so the multiplication has a number. Type the months you believe the project will take.
Does this page know my county's tax rate?
No. You type the annual tax figure from a bill, a county site, or a guess you are willing to label as a guess.
Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.