JB PARCELHolding Cost Calculator
Holding costs are the quiet killer on a flip. They do not show up in the purchase or the rehab budget, they just accumulate. Here is the daily number and what every month of slip costs you.
How this calculator works
Holding costs are everything you pay to own a property that is not yet producing income. Loan interest is usually the biggest piece, then taxes and insurance, then utilities and upkeep. On a flip they run from closing until the day the sale funds, which is longer than most people plan for because it includes listing time and the buyer's closing period.
The daily figure is the number worth memorizing. It converts schedule slip into dollars instantly. When your contractor says the countertops are two weeks out, that is not an inconvenience, it is a specific amount of money, and knowing the amount changes how hard you push.
Insurance deserves its own note. A vacant property under renovation is not covered by a standard homeowners policy. You need builders risk or a vacancy policy, and it costs more. Investors discover this at claim time more often than you would expect, which is the worst possible moment.
Add up the total and compare it to your projected profit. On a typical six-month Tennessee flip, holding costs commonly run $15,000 to $25,000. If your projected profit is $35,000, carry is consuming more than half of it, and a three-month overrun eliminates the deal entirely.
Worked example: six months on a flip
$232,000 of hard money at 11.5 percent, plus the usual carrying costs.
| Loan interest | $2,223.33 / mo |
|---|---|
| Taxes and insurance | $441.67 / mo |
| Utilities, lawn, security | $385.00 / mo |
| Total per month | $3,050.00 |
| Per day | $100.20 |
| Six-month total | $19,500 |
A hundred dollars a day. A three-month overrun, which is common, adds $9,150 and turns a $40,000 projected profit into $31,000. This is why experienced flippers pay a premium for a contractor who finishes on schedule, and why they order long-lead items before demo starts.
Questions investors ask
What are typical holding costs on a flip?
In most Tennessee markets, $2,500 to $4,000 a month on a mid-priced single-family financed with hard money. Interest is usually sixty to seventy-five percent of it. Over a six-month project that is roughly $15,000 to $25,000, which needs to be in your offer math from the beginning, not discovered at closing.
Do holding costs go in the 70% rule?
They are implicitly inside the thirty percent haircut, which is one of the assumptions the rule makes on your behalf. The MAO calculator lets you enter them explicitly, which matters when your timeline is longer than six months or your money is more expensive than typical.
What insurance do I need on a vacant rehab?
Builders risk, or a vacancy policy with a renovation endorsement. A standard homeowners or landlord policy generally excludes vacant properties, often after thirty or sixty days of vacancy, and will not pay a fire or theft claim during a renovation. Tell your agent exactly what you are doing and get the coverage in writing before demo starts.
Should I count my own time as a holding cost?
It is optional in the model and useful in practice. If running the job takes twenty hours a month that you would otherwise spend finding deals, that has a real cost. Put a number in the project management field and see whether the deal still works. If it only works because your labor is free, it is a job, not an investment.
How do I reduce holding costs?
Shorten the timeline, which beats every other lever. Order long-lead materials before closing. Have permits pulled and the contractor scheduled for day one instead of day thirty. List before the punch list is finished if the market allows it. On the financing side, pay down the balance with any cash you are not using, and check whether your lender charges a minimum interest period in the hard money calculator.
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Screening a real property? Pull its appraised value, assessed value, acreage, land use, and last recorded sale off the JB PARCEL parcel map and drop the real numbers into this calculator instead of guessing. Coverage runs across every county we carry.