What is Property Holding Cost?

Do you own a house or a rental? Are you wondering what that entails? One of the first things you should be aware of is holding costs. So what is property holding cost? “Holding costs” or “carrying costs” are whatever payments you need to make while in possession of a property. It’s mostly your expenses such as insurance, utilities, property tax, and maintenance fees. Owning a property comes with a lot of mandatory payments and paperwork.

A holding cost of property applies to all homeowners, whether you’re flipping a house, living in it, or renting out. These expenses are necessary every month for as long as you are in ownership of the property.

Property Holding Cost

What does property holding cost involve?

Including maintenance, taxes, and insurance, the typical holding cost of property ranges between 500 and 1,000 USD. However, this can change significantly based on your state and district.

HOA Maintenance

Either you, your community’s HOA (homeowner association), or your property manager needs to take care of property maintenance. If you are using an HOA, they take care of pests, yard care, streets, certain types of insurance, and city services like trash disposal, water, and other utilities.

HOAs are not a part of every homeowner’s life, but if you bought a house under an association’s governance, it is expensive and time-consuming to try and opt-out. You need an 80% vote from the homeowners in your HOA community.


What ensues if you decide not to pay your HOA fees? At best, they will demand you pay up or, at worst, make you sell your house. Without your money, they may fall behind on their tasks, causing further harm to the entire community. In short, if you are a member of an HOA and don’t have the time or money to opt-out, pay your fees.

Usually, they charge about 200 to 300 USD per month. HOA payments can be tax-deductible when the property you own is not your primary residence and is rented out.

Property Manager Maintenance

For those renting out their property, you might want a property manager. They take care of things like vetting your tenants so that you don’t get wrongfully charged for undue damage. They take care of maintenance issues regarding plumbing, air conditioning, heating, and other utilities.


Property management cost depends on various conditions. A property manager could charge a flat fee (typically around 100 USD per month) or a percentage of the rent (generally between 5% and 10% depending on your rates).

Property Tax

Property taxes make up about 47% of the local government’s income. These funds are intended to help school districts, public property, and things like sewage and water systems. Property tax is to maintain the streets and public areas of which you are apart. It averages 1.08% and is the sixth-highest tax in the United States.

Property Insurance

Several factors determine the price of your property insurance. Your property’s closeness to danger is a factor. For instance, insurance companies consider how near to a body of water your property is, whether you are in a hazardous weather area, and how far a fire station is from your property. Even things that seem benign like fireplaces or swimming pools affect property insurance.


The takeaway is, whether you plan on owning your property long or short term, you need to be aware of holding costs. If you’re flipping a house and want a quick turnaround or renting it for a steady income, you’ll need to factor in your holding cost expenses. Ignoring a holding or carrying cost could be devastating to your bank account. It’s just another one of those things you have to bear in mind.

Contact United Home Offer Now! to learn more about calculating holding costs.

Salman Zafar

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