After Repair Value

After Repair Value (ARV) refers to the estimated value of a property after all necessary repairs and improvements have been completed. This figure is often used by real estate investors to determine the potential profitability of a property investment, particularly in flipping or renovating properties.

For instance, if a distressed property is purchased for $150,000 and requires $30,000 in repairs, an investor might estimate the ARV to be $250,000 after renovations. The calculation would typically consider the local real estate market, comparable property sales, and the quality of renovations.

In a case where an investor buys a property for $200,000 and spends $50,000 on upgrades, if similar properties in the area sell for around $300,000 post-renovation, the ARV would be set at $300,000. This helps the investor assess their potential return on investment.