Posted by steve on January 04, 2003 at 09:41:00:
Re: above calculation - obviously if you’re using a hard money lender you need to recalculate accordingly.
How much are these holding costs? - Posted by ChrisC
Posted by ChrisC on January 03, 2003 at 17:21:35:
Dear RE enthusiasts -
I am trying to get a handle on the overall picture of “COGS”, cost of goods sold, regarding holding costs in particular. To the best of my knowledge they are:
Utilities
Liability Insurance
???
Other than the above, I don’t know what else. I have a chart from a Realtor that shows “approximate” months to sell a given SFR, per neighborhood, so I could multiply these holding costs times that number to get a ballpark figure. What are the different holding items and how much per month, say on a SFR worth 100K even?
Wondering if anyone could help.
Thanks,
ChrisC
Re: How much are these holding costs? - Posted by Space Available
Posted by Space Available on January 04, 2003 at 09:38:40:
I allow 1% of the FMV of the proprety per month. This covers PITI, utilities and maintenance (lawn service, snow plowing etc.) This actually works out to be fairly generous but I’d rather have a margin of safety.
Re: How much are these holding costs? - Posted by Ronald * Starr (in No CA)
Posted by Ronald * Starr (in No CA) on January 03, 2003 at 21:02:58:
Chris C------
Not just liability insurance. You will want fire insurance and other hazards insurance also.
If you are talking vacant houses, the insurance may run about $800 to $1500 a year. For occupied houses it used to be maybe $400 per annum, but rates are going up rapidly in a lot of areas. You had better call your local insurance people and talk to them about this.
Utilities cost different amounts in different places. But figure maybe $75-$110 a month. Water, garbage service, sewer, electricity, gas, street cleaning, and sometimes others.
Then, you left off property taxes. In Oregon the rate is about 2% a year of the value. In some places they will be higher. In CA, about 1% to 1.25% a year. Many places about 1.5%, so you are looking at maybe $125 a month for that.
Then there may be some other costs, depending upon condition of the home and how you want it to look and time of the year. Lawn or gardening service? $50-80 a month in the summertime. Snow removal service? I don’t know, I live in Coastal CA so never think about it. In some areas you have to worry about pests and pest control: ants, spiders, roaches, who know what else. Maybe $30 a month.
Just buy real, real cheap so you don’t have to worry too much about the exact carrying costs. Below 80% of fair market value, I’d suggest. Maybe more if the property is low-priced–less than $100K.
Good Investing*******Ron Starr**************
Re: How much are these holding costs? - Posted by JJ-KC
Posted by JJ-KC on January 03, 2003 at 18:11:13:
also the mortgage payment