Calculated ARV Estimate
Definition:
Calculated ARV estimate, also known as after repair value estimate, is the estimated value of a property after it has been repaired or renovated. It is calculated by subtracting the estimated cost of repairs or renovations from the market value of the property in its current condition.
Formula:
Calculated ARV Estimate = Market Value - Estimated Cost of Repairs
Example:
Here are some of the factors that can affect calculated ARV estimate:
Location: The location of the property can have a significant impact on its calculated ARV estimate. Properties in desirable locations tend to have higher ARV estimates than properties in less desirable locations.
Condition: The condition of the property can also have a significant impact on its calculated ARV estimate. Properties that need extensive repairs tend to have lower ARV estimates than properties that are in good condition.
Size: The size of the property can also have a significant impact on its calculated ARV estimate. Larger properties tend to have higher ARV estimates than smaller properties.
Features: The features of the property can also have a significant impact on its calculated ARV estimate. Properties with desirable features, such as a pool or a garage, tend to have higher ARV estimates than properties without these features.