Why it matters
- Holding costs are the monthly bills of owning a flip, mainly loan interest, property taxes, insurance and utilities.
- On a $250,000 loan at 11%, holding costs in our example come to about $3,240 a month, or $107 a day, and interest is about 71% of that.
- The typical flip took 161 days from purchase to resale in the second quarter, ATTOM said, so budget for at least five months plus a cushion.
Analysis: this piece includes our interpretation of the facts reported.
Holding costs, also called carrying costs, are what it costs to own a flip each month until it sells. To calculate them, add your monthly loan interest, property taxes, insurance, utilities and other bills, then multiply by the number of months you expect to hold the house. Then add a cushion for delays.
The typical flip took 161 days from purchase to resale in the second quarter of 2026, according to ATTOM. That is more than five months of bills before the sale closes.
What counts as a holding cost?
Any cost that keeps running while you own the house:
- Loan interest. Usually the biggest item on a financed flip.
- Property taxes. Divide the yearly bill by 12.
- Insurance. Ask your insurer what coverage a vacant house under renovation needs, and divide the yearly premium by 12.
- Utilities. Power, water and gas stay on for contractors and showings.
- Other bills. HOA dues, lawn care, security and winterizing.
One-time costs such as loan points, closing costs and agent commissions are not holding costs. They belong in your total deal budget. The Hard Money Loan Cost tool shows how points and fees change what a loan really costs.
How do you calculate holding costs?
Use this formula:
Monthly cost = Loan × Rate ÷ 12 + Taxes ÷ 12 + Insurance ÷ 12 + Utilities + Other
Total = Monthly cost × Months held
Per day = Monthly cost × 12 ÷ 365A worked example
This is a hypothetical deal, using round numbers:
| Item | Monthly cost |
|---|---|
| Interest: $250,000 at 11% | $2,292 |
| Property taxes: $4,800 a year | $400 |
| Insurance: $2,400 a year | $200 |
| Utilities | $250 |
| Lawn care | $100 |
| Total | about $3,240 |
That is about $107 a day. Interest is about 71% of the total.
- Six-month plan: about $19,450.
- A 161-day hold, the typical length in ATTOM's data: about $17,160.
- A two-month delay past the six-month plan: about $6,480 more.
A cash buyer would skip the interest, but holding costs in this example would still be about $950 a month.
If your lender charges interest only on rehab funds as they are drawn, your interest will start lower and rise as draws are released. The Draw Schedule Planner maps that out.
Why do holding costs matter more now?
Sales are taking longer, and financing costs more. Freddie Mac said the average 30-year fixed mortgage rate was 7.28% on Oct. 1, up from 6.34% a year earlier, which shrinks the pool of buyers for a finished flip. ICE said active listings reached 1.14 million in August, the most in nearly seven years. Cotality said Oct. 6 that it expects month-over-month home price declines through the winter.
A longer sale means more months of holding costs, and possibly a lower price. See Home Prices Rose 1.8% in August as Cotality Sees Winter Declines Ahead for the latest price data.
How to keep holding costs down
- Plan the timeline before you buy. Line up contractors, permits and materials before closing.
- Price for a slow sale. Run your numbers with one or two extra months. The Holding Cost Timer shows what each month adds.
- Know your floor. Holding costs raise the lowest price you can accept. The Break-Even Sale Price calculator includes them.
For the full renovation process, see the Fix the House playbook.
Sources
- ATTOM, Home Flipping Profits Continue Gradual Two-Year Decline (Oct. 1, 2026)
- Freddie Mac, Primary Mortgage Market Survey (Oct. 1, 2026)
- ICE, October 2026 Mortgage Monitor (Oct. 5, 2026)
- Cotality via Business Wire, Cotality: Buyers Continue to Pull Back as Home Prices Increase (Oct. 6, 2026)