Want to know what a property is worth after renovations? Let’s break down how to calculate ARV like a pro!
To calculate ARV:
Find Comparable Sales (Comps): Look for 3-5 properties in the area that are similar in size, condition, and features.
Average the Sale Prices: Add the sale prices and divide by the number of comps. For example, if three similar homes sold for $290,000, $300,000, and $310,000, the average is $300,000.
Adjust for Unique Features: If your property has upgrades, add value. If it’s missing something, subtract value for repairs.
And there you have it—your ARV! This number is crucial for estimating profit and setting your MAO (Maximum Allowable Offer).
The information in this article are of the opinion and experience of the author. Due diligence should always be done before investing in real estate.
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