After Repair Value (ARV)

3 Replies

Hi everyone.

I am having trouble estimating the ARV for the BP rental property calculator. Basically, I am not doing a flip, the house does not needs fixing (or at least that is what I think). Therefore, I would assume that I can ignore this number in the Rental property calculator, but the calculator does not let me. If the rental property is not a flip, why would I need this number, and how do you calculate it?

HI @Juan Rosado ,

You still need the ARV entered because the calculator needs to help you determine what value is being added. If you have a $100k house and do $$30k of improvements, that doesn't necessarily mean the house is now worth $130k.

Many traditional homeowners spend money on their house, but add less value than the cost of improvements (e.g. adding a sauna, building a pool,...) Since you're going about this as an investor, those "moneypits" are less likely to occur if you're focused on resale value rather than "personal touches."

If you don't have access to a realtor that will give you free comps (if you're going to sell the house, offer to sell through them), then go with a combination of the Zillow, Trulia, County Tax assessments, and then go down 5% to be extra cautious.

ARV is not really "calculated," it's more 'researched' best on surrounding sales.

Excited to see the before/after pics of your rental!

Originally posted by @Nathan Platter :

HI @Juan Rosado ,

You still need the ARV entered because the calculator needs to help you determine what value is being added. If you have a $100k house and do $$30k of improvements, that doesn't necessarily mean the house is now worth $130k.

Many traditional homeowners spend money on their house, but add less value than the cost of improvements (e.g. adding a sauna, building a pool,...) Since you're going about this as an investor, those "moneypits" are less likely to occur if you're focused on resale value rather than "personal touches."

If you don't have access to a realtor that will give you free comps (if you're going to sell the house, offer to sell through them), then go with a combination of the Zillow, Trulia, County Tax assessments, and then go down 5% to be extra cautious.

ARV is not really "calculated," it's more 'researched' best on surrounding sales.

Excited to see the before/after pics of your rental!

 Thank you :)

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