ARV Calculator
Calculate After Repair Value and determine maximum bid price for real estate investments
Calculate After Repair Value (ARV)
Market value before renovations
Expected value increase from renovations
Purchase Analysis
Total estimated renovation expenses
Percentage of ARV to offer (70% rule is standard)
Investment Analysis Results
Formula used: ARV = Current Value + Renovation Value
Maximum bid formula: (ARV × 70%) - Renovation Cost
Total Investment: $0
Potential Profit: $0
Investment Analysis
Example Calculation
Real Estate Investment Example
Property current value: $100,000
Expected renovation value: $50,000
Renovation costs: $25,000
70% purchase rule applied
Calculation Results
ARV = $100,000 + $50,000 = $150,000
Maximum bid = ($150,000 × 70%) - $25,000
Maximum bid = $105,000 - $25,000 = $80,000
Potential profit: $45,000 (30% ROI)
Investment Rules
70% Rule
Standard rule for maximum bid
Ensures 30% profit margin
75% Rule
For experienced investors
Higher bid, lower margins
65% Rule
Conservative approach
Higher profit margins
Investment Tips
Always account for holding costs and closing fees
Get multiple renovation cost estimates
Research comparable sales in the area
Consider market conditions and timing
Factor in unexpected repair costs (10-20% buffer)
Understanding After Repair Value (ARV)
What is ARV?
After Repair Value (ARV) is the estimated value of a property after all repairs and renovations are completed. It's a crucial metric for real estate investors to determine the maximum purchase price and potential profitability of an investment property.
Why is ARV Important?
- •Determines maximum bid price for profitable investments
- •Helps calculate potential return on investment (ROI)
- •Guides renovation budget decisions
- •Enables comparison of different investment opportunities
ARV Calculation Methods
Method 1: Property Value
ARV = Current Property Value + Renovation Value
Method 2: Area Price
ARV = Average Price per Sq Ft × Total Area
70% Rule Formula
Maximum Bid = (ARV × 70%) - Renovation Costs
Ensures 30% profit margin for investors