Carry Cost

Definition

The ongoing expenses required to maintain a property while it generates no income, including taxes, insurance, utilities, and maintenance. Money leaving your pocket while nothing comes in.

Example Usage

The empty commercial building's carry costs were running $8,000 per month while we searched for a tenant.

Origin

Business terminology; the cost of 'carrying' (maintaining) an asset.

Fun Fact

Real estate investors spend hours analyzing carry costs because they can quickly turn a 'great deal' into a financial disaster.

Source: Real Estate Investment and Analysis standards

Related Terms

Beginner

deposit

Money you surrender to a landlord as insurance against your inevitable humanity—spilling wine, scuffing floors, or daring to hang pictures. In real estate, it's the upfront cash that proves you're serious about a property, which you'll spend the next decade trying to get back. Also serves as a landlord's retirement fund in 47% of rental agreements.

🏠 Real Estate

Intermediate

option

In real estate and finance, a contract that gives you the right but not the obligation to buy or sell something at a predetermined price, essentially letting you call dibs with an expiration date. It's like having a golden ticket to purchase property or assets later while everyone else has to deal with current market chaos. The ultimate "let me think about it" that actually has legal teeth.

🏠 Real Estate

Intermediate

Adjustable Rate Mortgage (ARM)

A mortgage with an interest rate that adjusts periodically, a financial arrangement that seems great until rates rise.

🏠 Real Estate

Beginner

Starter Home

A concept from the 1990s where young people could afford a small first home before upgrading. Now it mostly exists as a fairy tale told by boomers alongside legends of affordable college and pension plans.

🏠 Real Estate

Advanced

seller carry-back

When the seller provides financing to the buyer instead of requiring a traditional mortgage, essentially becoming the bank. It's either a creative solution or a sign someone couldn't qualify for actual financing.

🏠 Real Estate

Intermediate

variance

Official permission to deviate from zoning requirements, granted by local government when strict application would cause hardship. It's a get-out-of-jail-free card for zoning violations you'd like to commit.

🏠 Real Estate

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