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Holding costs are CRITICAL when calculating the total cost of a potential deal. These numbers have to be considered from the day you acquire the property until the day you sell it.
The traveling gurus and flashy seminars that crow about their students’ big checks in the tens of thousands never tell you about how much of that was actually eaten away by holding costs while they held it. Here are a few of the holding costs you need to consider:
- The monthly mortgage payment
- 1/12 of the annual property taxes put away each month
- 1/12 of the annual property insurance costs put away each month
- Working utilities — water, electrical, garbage, etc.
- Lawn and pool care
- Snow removal
- Realtor commission if you’re selling with a real estate agent
