Investing
What is ARV (after repair value)?
After repair value is what a property will sell for once renovation is complete. Every renovation deal is priced backwards from it, which makes it the highest-stakes estimate in the analysis.
It is established the same way any value is: from properties of similar size, location and finish level that have actually sold recently — in renovated condition.
- What this is
- An explanation of after repair value and how to determine it credibly.
- Who it is for
- Flippers, BRRRR investors and anyone buying a property to renovate.
- The problem
- ARV is the number every renovation deal depends on, and it is the number most often set by optimism rather than by comparable sales.
- What happens next
- Set ARV from sold comparables, then work backwards to a maximum purchase price.
Building the estimate
Use three to five sold comparables within the last six months, ideally within a mile and within ten to fifteen percent of the subject's square footage, all in finished condition comparable to what you intend to deliver.
Adjust for real differences: bedroom and bathroom count, garage, finished basement, lot size and street quality. Then take a conservative point in the resulting range rather than the top of it.
The 70% rule and what it protects
The rule says maximum purchase price equals seventy percent of ARV minus repair costs. On a property with a $400,000 ARV and $60,000 of repairs, that is $220,000.
The thirty percent is not profit. It absorbs holding costs, financing, selling costs of six to eight percent, and the overruns that occur on most renovations. Investors who treat it as pure margin are the ones who discover why it exists.
Where ARV estimates fail
Three failure patterns recur: using active listings instead of sold prices, over-improving beyond what the street supports, and assuming the market at sale time matches the market at purchase time.
The ceiling of a neighborhood is real. A kitchen that would be right in a higher-priced area does not raise value in a lower-priced one; it just costs more.
Do the math
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Open the rehab / fix-and-flip calculator →Common questions
How do you calculate ARV?
Take the average adjusted price per square foot of three to five recently sold, renovated comparables nearby and apply it to the subject property's square footage, then adjust for features the comparables lack.
What is the 70% rule in house flipping?
Maximum offer equals seventy percent of after repair value minus estimated repair costs. The thirty percent covers holding, financing, selling costs and overruns.
Can I use an appraisal for ARV?
A subject-to-completion appraisal based on your renovation plans is the most rigorous approach, and lenders often require one for renovation and BRRRR financing.
How accurate are automated value estimates for ARV?
Poor. Automated models are trained on typical condition and cannot see your renovation scope or the neighborhood's finish ceiling. Use sold comparables.
What if there are no renovated comparables nearby?
That is itself a signal: the market may not have demonstrated demand at your target price. Widen the radius cautiously and reduce your estimate for the uncertainty.
Should ARV include the cost of selling?
No. ARV is the sale price. Selling costs of six to eight percent are subtracted afterward when you calculate profit.
Want this answered for one property?
Property Intelligence™ applies this to a specific address using public records, uploaded documents, comparable sales and professional review — and states plainly what is known, what is missing and what to do next.
Related reading
Part of these decisions
This guide in a specific market
- Review the Troy rehab analysis process
Is this rehab worth viewing, and what must be verified before estimating the project?
Last reviewed August 3, 2026. Educational information, not financial or legal advice.