The direct answer
ARV is an estimate of the renovated subject’s value using relevant sale evidence adjusted to the assumed completed condition. The arithmetic can combine adjusted comparables, but the quality of the selection and adjustments determines whether the estimate is useful.
Compare the completed subject, not its current condition
Identify the renovation scope and expected finished quality before selecting comparable sales. A recently renovated property may support the finished scenario better than an unrenovated nearby sale, but location, size and property type still matter. Document the assumed condition and avoid changing it implicitly as you move between the ARV estimate and rehab budget.
To apply the approach to an editable scenario, use the ARV Calculator. For the neighboring question, explore Property Value Calculator.
Enter already adjusted sale indications
The tool combines three user-entered adjusted comparable values. The weights express the relative importance assigned to that evidence and are normalized by their sum. It does not calculate price adjustments or certify a valuation. A high weight should reflect relevance and evidence quality, rather than making the indication equal a preferred target. At least one weight must be positive.
Carry a value range into the acquisition model
The lowest and highest entered adjusted values give a simple comparable range. That range is not a confidence interval or an automatic market forecast. Use lower and upper supported assumptions in the flip or BRRRR model to see whether the acquisition scenario relies on the highest outcome. Keep renovation spending separate because an extra dollar of cost need not create an extra dollar of resale value.
Worked example
Adjusted values of $380,000, $390,000 and $400,000 with weights 33.33, 33.33 and 33.34 produce $390,001. The one-dollar difference from the equal-weight average follows the supplied weights. The entered comparable range remains $380,000 to $400,000.
Common mistakes and limitations
Do not use active asking prices as though they were closed transactions without identifying the evidence type. Do not treat the displayed range as a professionally established appraisal interval.
User-entered comparable analysis only. Not an appraisal and no MLS data is accessed.
Frequently asked questions
Does ARV include rehab cost?
It estimates a completed-condition value. Rehab spending is a separate project cost in the acquisition or flip model.
Must weights sum to 100?
No. The tool divides by their sum; the relative weights determine the indication.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- IRS — Instructions for Form 709 (2025) — real property valuationComparable-sales concept and adjusting for differences in date, size, condition and location.
- IRS — Publication 551 (12/2025), Basis of AssetsFair-market-value concept and use of similar-property sales as evidence.
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