Have you encountered the term ARV while trying to learn the value of your home in Jacksonville? If you’re unsure what it is, how it works, and how it affects your home’s value, fret not because we’re about to present all these details for you. Keep reading to learn more about after repaired value.
Understanding After Repaired Value
After repaired value or ARV refers to your property’s value after doing improvements or renovations. This gives you an idea of how much money you could get from your property after completing renovations. Real estate investors who fix and flip homes often use ARV. However, it can also be used in other types of real estate investment wherein renovations and repair can add value to the property.
The formula for calculating ARV is straightforward. You just have to consider the property’s current value and the cost of repairs or renovations. That is:
- ARV = Current Property Value + Renovations Value
It’s important to note that repairs and renovations are not based on your own likes or dislikes. The repairs and renovations are what’s need to make your home desirable and worthwhile to buyers.
An appraiser can help determine both the current value of your property in Jacksonville and that of the renovations. However, several factors need to be considered for an accurate calculation of ARV. These include the following:
- Property’s size (in square footage)
- Lot size
- Property age
- Number of bedrooms and bathrooms available
- Property’s construction and style
- Other features, like pool, attached/detached garage, and basement
- Overall property condition
Real estate investors usually find up to six comparable properties (or comps) that have been sold no more than three months before. Then, the ARV is computed based on the average sale price of all these comparable properties.
What To Consider About ARV
ARV is beneficial in helping determine the value of your home and whether or not you should do renovations. However, you must also consider changes in value during renovation. Renovation can take a while, so expect changes while the renovation is ongoing. A year from now, the market may not be the same. Apart from the value of the repair, your renovation costs may also go up.
Consider changes in the real estate market as well. National events are sure to create an impact on the matter. However, local markets are also crucial. Events and developments near your area will impact the value of your home.
Understanding after repaired value, or ARV, is indeed beneficial in knowing the value of your home. The calculation may look simple, but different factors are involved. If you have other questions about ARV, feel free to contact us or check out our Frequently Asked Questions.