What Is ARV in Real Estate? Explained
Updated June 17, 2026
ARV (after-repair value) is the price a property will sell for once it's fully renovated to market standard. You calculate it from recent sales of comparable, already-renovated homes nearby — not from the subject's current condition. ARV is the anchor for every offer formula: the 70% rule, MAO, and your max bid all start from this single number, so getting it wrong poisons the whole deal.
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Every offer an investor makes traces back to one number: after-repair value. Get ARV right and the rest of the math — repair budget, the 70% rule, your maximum allowable offer — falls into place. Get it wrong and you'll either overpay for a deal that never had margin or pass on one that did.
ARV isn't an appraisal and it isn't what the seller thinks the house is worth. It's a disciplined estimate of the resale price after the work is done, built from comparable sales. This guide covers how to pull that number, what corrupts it, and how it feeds the offer you eventually blast out.
What ARV actually measures
After-repair value answers a single question: if you renovated this property to the standard buyers in this neighborhood expect, what would it sell for? It is forward-looking and condition-adjusted — the current peeling-paint, dated-kitchen reality is irrelevant to ARV except as a guide to what the repairs will cost.
The distinction matters because sellers, agents, and even some investors confuse ARV with current market value or with Zillow's Zestimate. Neither is ARV. The Zestimate is an algorithm averaging public data; current value reflects the home as-is. ARV is the renovated-and-sold number, and only comparable sold properties can tell you what it is.
How to calculate ARV from comps
Start with sold comps — properties that actually closed, not active listings, because list prices are aspirations and sold prices are facts. Pull three to five renovated homes within roughly half a mile, sold in the last six months, similar in square footage, bed/bath count, and style. Then adjust for differences: a comp with an extra bathroom or a finished basement isn't apples-to-apples.
The common shorthand is price per square foot: take the adjusted comp sale prices, derive a per-square-foot figure, and multiply by the subject's square footage. It's a starting point, not gospel — square footage alone ignores lot size, location nuance, and finish level. The more your comps match the subject, the less adjustment guesswork you're doing, and the tighter your ARV.
| Factor | Ideal range | Why it matters |
|---|---|---|
| Recency | Sold within 6 months | Stale comps miss recent market moves |
| Distance | Within 0.5 miles | Schools and blocks shift value fast |
| Condition | Renovated / move-in ready | Must match your post-rehab finish |
| Size | Within 20% of square footage | Big size gaps distort price per sq ft |
| Type | Same style and bed/bath | A ranch and a two-story aren't equal |
What makes a comparable sale usable for ARV
Where ARV estimates go wrong
The most expensive mistake is using active listings instead of sold comps. Listings tell you what sellers hope to get; only closings tell you what buyers actually paid. The second is reaching too far — pulling a comp from a nicer subdivision or a different school zone because it supports the number you want. ARV is a measurement, not a wish.
Optimism is the quiet killer. Investors who fall in love with a property nudge the ARV up, shave the repair estimate down, and talk themselves into a deal with no margin. Discipline here is what separates operators who survive from those who learn the hard way. When in doubt, take the conservative comp.
From ARV to an offer you can send
ARV is the input, not the output. Once you have it, the 70% rule and your maximum allowable offer formula convert it into a number you can actually put on paper: typically ARV multiplied by a percentage, minus estimated repairs. That's the offer.
This is where deal analysis hands off to outreach. Once you know your number on a property — or across a whole list of properties comped against your buy box — that figure becomes the offer you send. BILT CRM blasts those LOIs to listing agents at scale, so the ARV work you do up front turns directly into offers in the market instead of a spreadsheet that never leaves your desktop.
Frequently asked
How do I calculate ARV?
Pull three to five recently sold, renovated homes within half a mile that match the subject's size and style. Adjust their prices for differences, derive an average price per square foot, and multiply by the subject's square footage. Use sold comps only — never active listings — and lean conservative when comps disagree.
Is ARV the same as a Zestimate?
No. A Zestimate is an algorithm averaging public data on a home's current state. ARV is the price the property will sell for after a full renovation, built from comparable sold properties. The two can differ by tens of thousands of dollars, which is why investors never offer off a Zestimate.
How many comps do I need for a reliable ARV?
Three to five strong comps is the working standard. Fewer than three and one outlier skews everything; far more and you're usually reaching into dissimilar properties to pad the list. Quality beats quantity — three tight, recent, nearby comps beat ten loose ones every time.
What if there are no recent comps in the area?
Widen carefully: extend the time window before the geography, then the geography before the property type. Each step you loosen adds uncertainty, so adjust your offer for that risk. In thin markets, lean more conservative on ARV because you have less data confirming it.
The takeaway
ARV is the renovated resale price, drawn from recent sold comps that match the subject in location, size, and finish — never from listings, Zestimates, or optimism. It's the anchor every offer formula builds on, so a disciplined ARV protects the whole deal. Once you have it, the number becomes an offer you can send — at scale, with BILT.