Bathurst Blog

The term ‘holding costs’ in property refers to the outgoings and expenses incurred by an owner of an investment property of any type pending receipt of rental income from a tenant or the proceeds on sale of the property to another party. Don’t think of it as a hidden menace, but be aware that it’s part of investing.

Holding costs can include expenses incurred by the owner while a property is vacant pending reletting for any period of time upon condition that you’re genuinely trying to relet, or while a property is vacant during a planning delay, renovation or redevelopment. The possibility of having to meet costs on a property generating immediate income must be taken into calculation when considering real estate investment, whether short term (renovate and sell) or long term permanent rental investment.

These holding costs usually include such items as council rates, water rates, land tax, charges for services such as electricity, insurance, strata levies (if applicable), maintenance and interest costs on borrowings or mortgage interest paid on the investment. For property investors, most holding costs can be offset against your general income for tax purposes.

However our agency does not give financial or taxation advice, so sound professional advice is necessary from your accountant or financial adviser to determine tax advantages or costs.

Raine & Horne Bathurst are very experienced real estate agents, and well able to advise on any sale, purchase, letting or property management.