What Is ARV in Real Estate? (After Repair Value Explained)
ARV, or After Repair Value, is what a property will be worth once renovations are complete. Here is how investors calculate it from comps, a worked example, and the mistakes that cost real money.
ARV, or After Repair Value, is the price a property is expected to sell for once all planned repairs and upgrades are complete. It is a forecast of finished-condition market value, and in a flip or BRRRR deal it is the number every other figure gets derived from.
What does ARV mean in real estate?
ARV answers one question: if this house were renovated to the standard buyers in this neighborhood actually expect, what would it close for in today's market? Every part of that question carries weight. "Renovated" means the full scope is finished. A house with a new kitchen but original bathrooms and a failing roof does not sell at ARV. It sells at a discount that buyers calculate themselves, usually harshly. "To the standard buyers expect" means the neighborhood sets the ceiling. If every comparable sale in the subdivision closes between $310,000 and $335,000, a $60,000 designer kitchen does not lift your exit to $400,000. At best it moves you to the top of the range that already exists. "In today's market" means a defensible ARV rests on closed sales you can point to right now, not on an assumption that prices will be 6 percent higher by the time you list. ARV is not tax assessed value, not current as-is value, and not insurance replacement cost. Those are four different numbers, and mixing them up is the most common beginner mistake in flipping.
How do you calculate ARV?
The method is the sales comparison approach, the same framework a licensed appraiser uses. Four steps.
Step 1: Pull sold comps that match the finished product
You are not comping the house you are buying. You are comping the house you intend to sell. That means your comps should be renovated properties, not other distressed ones. Reasonable starting filters:
| Filter | Typical starting range | Why it matters |
|---|---|---|
| Sale date | Closed in the last 3 to 6 months | Older closings reflect a different market |
| Distance | 0.5 to 1 mile suburban, tighter in dense urban grids | Value changes block to block |
| Living area | Within about 20 percent of subject square footage | Price per square foot is not linear across sizes |
| Property type | Same type and ownership form | A fee simple townhouse can compare to a detached house in the same project; a condo usually cannot |
| Bedrooms | Same count where possible | Bedroom count defines the buyer pool |
| Condition | Renovated or updated | You are pricing the exit, not the entry |
Step 2: Adjust each comp for its differences
No comp is identical to your subject. Adjust the comp's sale price toward your property:
- •If the comp is better than your subject (larger, has a garage you lack, backs to a greenbelt), adjust the comp price down. - If the comp is worse, adjust it up. Adjust for the things buyers pay for: living area, bedroom and bathroom count, garage, lot size, pool, view, and condition. Skip the things they do not price separately, like a new water heater.
Step 3: Weight the closest comps hardest
A comp on the same street in the same subdivision beats a slightly better-matched comp a mile away. Geography and school attendance boundaries dominate.
Step 4: Reconcile to one number
Do not average blindly. Pick the value the two or three strongest comps support, then check that your number sits inside the observed range rather than above it.
ARV calculation example (illustrative numbers)
Subject: 3 bed, 2 bath, 1,450 sq ft, no garage, needs a full cosmetic renovation. All figures below are illustrative.
| Comp | Sold price | Sq ft | Notes | Adjustments | Adjusted value |
|---|---|---|---|---|---|
| A, same street | $312,000 | 1,480 | Renovated, 1 car garage | Garage -$8,000, size -$1,500 | $302,500 |
| B, three blocks away | $288,000 | 1,390 | Renovated, no garage | Size +$3,000 | $291,000 |
| C, next subdivision | $335,000 | 1,610 | Renovated, pool, 2 car garage | Pool -$15,000, garage -$14,000, size -$8,000 | $298,000 |
What is the difference between ARV and as-is value?
As-is value is what the property is worth today, in its current condition, with all its deferred maintenance. ARV is what it is worth after the work is done. The gap between them is not the same as your rehab budget. A $55,000 renovation does not automatically add $55,000 of value. In strong flip markets the value created exceeds the cost; in soft or over-improved markets it does not. Treating rehab dollars as a guaranteed dollar-for-dollar value increase is how flips lose money on paper before a single wall comes down.
Why a small ARV error becomes a large loss
Offer formulas are built on ARV, so any error in ARV multiplies. The common flip screen is the 70 percent rule: maximum offer equals ARV times 0.70, minus repairs.
| ARV used | Rehab | 70% rule max offer | Result |
|---|---|---|---|
| $296,000 (comp supported) | $55,000 | $152,200 | Baseline |
| $320,000 (optimistic, 8% high) | $55,000 | $169,000 | $16,800 overpaid |
How to pressure test an ARV before you offer
1. Count your comps. One comp is an anecdote. Three to five closed and adjusted comps is a position you can defend to a lender or a partner. 2. Check the price per square foot spread. If your comps range from $180 to $265 per square foot, you are pulling from two different micro-markets. Split them and pick the one your property actually sits in. 3. 4. Confirm the comp's condition. A comp that closed high because it was fully renovated supports your ARV. A comp that closed high while dated means the whole street is underpriced and your ARV may be higher than you think. 5. Underwrite the low end. If the deal only works at the top of your comp range, it is not a deal.
Where ARV fits into the rest of your analysis
ARV feeds your maximum offer, your loan sizing, your profit projection, and your refinance target if you are holding. Get it right first and the rest of the model follows. To run the numbers, start with the free ARV calculator, which requires no signup. Pair it with the rehab cost estimator so your repair figure is not a guess, then push the full deal through the deal analyzer to see profit, offer ceiling, and returns together. Resideline builds ARV estimates from visible, adjustable comps rather than a black box, so you can see exactly which sales drove the number and swap out any comp that does not belong. Condition is estimated from listing photos, which is an estimate and not an inspection, and that estimate drives the as-is versus ARV framing. Live valuations currently cover 31 US states. Estimates are frozen when a property lists and later graded against the real closing price, and those results are published on the public accuracy dashboard. If you are screening many addresses at once, ARV Runner handles bulk ARV pulls.
Frequently Asked Questions
How do you calculate ARV in real estate?
Pull three to five recently closed sales of renovated homes that match your property on location, type, size, and bedroom count. Adjust each comp's sale price toward your subject, lowering it where the comp is superior and raising it where it is inferior. Then reconcile to a single number using the closest and most similar comps, rather than averaging everything equally.
Is ARV the same as market value?
No. Market value normally refers to what a property is worth in its current condition. ARV is the projected market value after a specific scope of repairs is completed, so it is condition specific and forward looking. A property has both an as-is value today and an ARV that only exists if the renovation actually gets done.
Does ARV include the cost of repairs?
No. ARV is the finished sale price, with repair costs subtracted separately when you calculate your offer. That is why the 70 percent rule reads as ARV times 0.70 minus repairs. Adding rehab cost to the as-is value to produce an ARV is backwards, because renovation dollars and value created are rarely equal.
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