How to Calculate ARV (After Repair Value) for Real Estate Investing

What is ARV (After Repair Value)?

After Repair Value (ARV) is the estimated market value of a property after all renovations and repairs are completed. It's the single most important number in any fix-and-flip or BRRRR deal because it determines your potential profit.

The ARV Formula

The basic formula is straightforward:

ARV = Average Price Per Square Foot of Comparable Properties x Square Footage of Subject Property

However, experienced investors know that the real art is in selecting the right comparable properties (comps).

Step-by-Step: How to Calculate ARV

Step 1: Find Comparable Properties

Look for recently sold properties (within the last 3-6 months) that are:

Within 0.5 to 1 mile of your subject property

Similar in size (within 200 sq ft)

Similar in bed/bath count

In similar or better condition (post-renovation)

Same property type (single family, duplex, etc.)

Step 2: Adjust for Differences

No two properties are identical. Make adjustments for:

Square footage: $50-150 per sq ft difference

Bedrooms/bathrooms: $5,000-15,000 per bedroom, $8,000-20,000 per bathroom

Garage: $10,000-25,000

Pool: $10,000-30,000

Lot size: Varies by market

Age/condition: Varies significantly

Step 3: Calculate the Average

Take the adjusted prices of your 3-5 best comps and calculate the average. This is your ARV.

Real-World Example

Subject Property: 3 bed / 2 bath, 1,500 sq ft in Houston, TX

Average Price/Sq Ft: ($196 + $190 + $200) / 3 = $195

ARV: $195 x 1,500 = $292,500

The 70% Rule

Most investors use the 70% rule to determine their maximum offer:

Maximum Offer = ARV x 70% - Repair Costs

If ARV is $292,500 and repairs are $45,000: Maximum Offer = $292,500 x 0.70 - $45,000 = $159,750

Common Mistakes to Avoid

Using comps that are too far away — Stay within 1 mile in urban areas

Using outdated sales — Stick to the last 3-6 months

Ignoring market trends — Is the market appreciating or declining?

Over-estimating the renovation — Be realistic about what you'll actually do

Not enough comps — Use at least 3, ideally 5

How PropertyARV Makes This Easy

Instead of spending hours pulling comps manually, PropertyARV's Comp Finder automatically searches for comparable properties, applies intelligent filters, and calculates your ARV in seconds. Our AI-powered analysis considers all the factors above and gives you a data-backed number you can trust.

Try the free ARV Calculator →