What Does After Repair Value (ARV) Mean? #
After Repair Value, or ARV, is the estimated value of a property once renovations are finished. Investors rely on this number to decide whether a project makes financial sense, and lenders use it to determine how much they are willing to finance.
How ARV Is Used #
Investors look at ARV to predict profit potential. Lenders also use ARV to set loan amounts, often approving funding as a percentage of the property’s projected value after upgrades. A strong ARV makes it easier to secure financing and ensures that the project can support both construction costs and repayment.
How ARV Is Calculated #
ARV is usually estimated by looking at comparable sales, of similar properties in the same area that have been recently renovated. An appraiser or broker may provide a professional opinion, but investors often run their own numbers before submitting a project for financing.
Why ARV Matters #
- Guides investors in setting a realistic resale price
- Helps shape renovation budgets so projects stay profitable
- Tells lenders how much they can safely finance
- Protects investors from overpaying for distressed properties
Summary #
After Repair Value (ARV) shows what a property should be worth after renovations. By calculating ARV, investors can build accurate budgets, secure financing, and plan profitable exits with confidence.