Posted by Monique on January 20, 2001 at 18:32:00:
Bert,
Good to see you posting again!
I’d saying that your holding costs should be the P&I (or PITI, if applicable). I think you want to understand the total out-of-pocket funds required to feed your property until it’s sold. It’s kind of a view into cash flow for the property.
From a Profit & Loss standpoint, your principal payments will simply show back up in your Profit column once you are paid off.
My $0.02
Monique
Holding costs - Posted by Bert G
Posted by Bert G on January 20, 2001 at 14:06:40:
Think I mislaid a brain cell somewhere, I’m drawing a blank on this.
My DIY rehab took lots longer than expected between closing and occupancy–like a few months longer–during which of course I was paying utilities and mortgage payments.
In figuring up my holding costs, do I figure both P&I or just interest?
They’re both coming out of my pocket, but the principal essentialy went into my pocket in the first place.
Thanx
BG
Re: Holding costs - Posted by Bud Branstetter
Posted by Bud Branstetter on January 21, 2001 at 11:49:28:
Any expense you did to make income is deductable. Major improvements may have to be capitalized then depreciated. Yes, utilities are a holding cost that can be expensed. What difference does it make if you classify them as holding cost or other expense.