What is ARV in real estate? You’ve heard the term before but might not know what it means. ARV stands for after repair value, the value of a property AFTER you rehab, renovate, or upgrade it. While this metric may seem like something that only house flippers should care about, ARV is something that ANY rental property investor should pay close attention to because if you get it wrong, you could lose tens of thousands of dollars.
In this Rookie Reply, we’ll show you how to estimate ARV and what common mistakes rookies make when calculating this crucial number. Then we answer how to write off repairs vs. CapEx (capital expenditures) on your taxes, and Ashley’s easy answer when you don’t know the difference between the two! Plus, why you should ALWAYS check your breakers when something goes wrong.
If you want Ashley and Tony to answer a real estate question, you can submit a question here, post in the Real Estate Rookie Facebook Group, or call us at the Rookie Request Line (1-888-5-ROOKIE).
In This Episode We Cover:
ARV (after repair value) explained and why it’s so useful when buying rental property
How to estimate ARV and pull comps from nearby sold properties
Rookie mistake you might make when estimating ARV and how to know your calculations are correct
When ARV is (and isn’t) important, plus, why purchase price isn’t everything
CapEx (capital expenditures) vs. repairs and how to write these common expenses off
Why Ashley can’t ever just relax on the weekends
And So Much More!
Links from the Show
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Ask Us Your Investing Question
Apply to Be a Guest on the “Real Estate Rookie” Podcast
Hear Our Recent Episode with Pace Morby
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Books Mentioned in the Show:
Real Estate Rookie by Ashley Kehr & Tony Robinson
Check the full show notes here: https://www.biggerpockets.com/blog/rookie-336
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