What is an ARV appraisal?

If you’re investing in real estate—especially fix-and-flip projects—chances are you’ve come across the term ARV, or After-Repair Value. It’s a critical figure used by buyers, investors, lenders, and appraisers to estimate the future value of a property after planned renovations are complete.

But what exactly is an ARV appraisal, and why does it matter? Let’s break it down.

What Does ARV Mean?

ARV stands for After-Repair Value—the estimated market value of a property once all proposed renovations or improvements have been completed. This number plays a key role in real estate investment decisions, as it helps investors determine whether a property will be profitable after factoring in the purchase price and renovation costs.

What Is an ARV Appraisal?

An ARV appraisal is a specialized appraisal report that estimates the property's future market value based on proposed repairs or improvements. Unlike a standard appraisal, which focuses on a property’s current condition, an ARV appraisal takes a forward-looking approach.

To develop an ARV, an appraiser will:

• Inspect the current state of the property

• Review a detailed scope of work provided by the investor or contractor (including upgrades to flooring, kitchens, bathrooms, roof, etc.)

• Analyze comparable sales (comps) of similar properties in the same area that reflect a renovated condition

• Apply adjustments based on market data to estimate what the subject property would be worth post-renovation

  
  

The result is a professional, unbiased opinion of value that lenders or investors can rely on when making financing or buying decisions.

Why Do You Need an ARV Appraisal?

Here are some common scenarios where an ARV appraisal is essential:

1. Hard Money or Rehab Loans

Most hard money lenders base their loan amounts on a percentage of the ARV. A certified appraisal helps them validate the risk and determine how much they’re willing to lend.

2. Investment Planning

Flippers and BRRRR (Buy, Rehab, Rent, Refinance, Repeat) investors use ARVs to evaluate potential return on investment (ROI) and decide whether a deal is worth pursuing.

3. Risk Reduction

An ARV appraisal helps ensure that everyone involved—borrower, lender, or investor—is making decisions based on realistic, market-supported data rather than guesswork.

How Is It Different from a Traditional Appraisal?

Traditional Appraisal	ARV Appraisal
Based on current condition	Based on proposed improvements
Uses comps of similar as-is properties	Uses comps of similar fully renovated properties
Common for purchase or refinance	Common for fix-and-flip, BRRRR, or construction loans

What to Provide to the Appraiser

To ensure a reliable ARV appraisal, you’ll want to provide:

• A detailed scope of work

• Photos or renderings of the planned finishes, if available

• Budget estimates or contractor bids

• Any permits or architectural plans, if applicable

The more clear and detailed your renovation plan is, the more accurate your ARV will be.

Final Thoughts

An ARV appraisal is a vital tool for investors and lenders navigating the world of real estate rehabs. It provides a clear picture of the property’s potential, helping you make smart, informed financial decisions. If you’re planning a renovation-heavy purchase, don’t skip this step—your numbers (and your bottom line) depend on it.

Need an ARV appraisal for your next project? Contact us today—we offer fast, accurate valuations tailored for investors.