Fix & Flip Holding Costs: The Expense Everyone Forgets
Ask a new flipper about their numbers and they'll tell you the purchase price and the rehab budget. Ask about holding costs and you'll often get a blank look — which is exactly why so many flips make far less than projected. Holding costs are the meter running every single day you own the property.
What holding costs include
- Financing — interest on your loan or hard money, often the biggest one.
- Property taxes and insurance — accruing whether or not work is happening.
- Utilities — power and water you need on during the rehab.
- Selling costs at the end — agent commissions, closing costs, staging.
Holding costs scale with time, not effort. A flip that runs three months over schedule can quietly erase a big share of the projected profit — which is why realistic timelines matter as much as the rehab budget.
Build them into the offer
The classic 70% rule exists partly to leave room for these costs — but a rule of thumb is no substitute for actually estimating your monthly carry and multiplying by a realistic (not hoped-for) hold period, then baking that into your maximum offer.
Then stress-test the timeline
Run your numbers at the expected timeline and again at "everything runs two months long." If the deal only works in the optimistic case, it's not a deal — it's a bet on perfect execution.
Model the whole flip. The EYRIE Deal Analyzer includes a Fix & Flip mode that accounts for holding costs and timeline before you commit. See it on Etsy →