What does "ARV" stand for in real estate investment?

"ARV" stands for After Repair Value in real estate investment. This term is critical for investors, particularly in the context of fix-and-flip projects or rehabbing properties. It represents the estimated value of a property after all renovations and repairs have been completed. Understanding ARV helps investors determine the potential profit margin on a property by allowing them to estimate how much they can sell the property for once it is improved.

Investors do extensive research and analysis to determine an accurate ARV, often considering comparable properties in the market that have been recently sold, taking into account the improvements that are planned. By knowing the ARV, investors can make informed decisions on purchase prices, renovation budgets, and anticipated return on investment.