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.
Ashley:
This is Real Estate Rookie, Episode 336. My name is Ashley Kehr, and I’m here with my co-host, Tony J. Robinson.
Tony:
Welcome to the Real Estate Rookie Podcast where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kick start your investing journey. Today, we’re doing a Rookie Reply, which means we’re answering questions from you, our audience. Ashley and I love doing these episodes because we get to talk to you guys. We get to answer the questions that are most pressing in your brains and your minds. Today, we talk a lot about ARV. I’m not even going to tell you what that is yet because you guys need to listen through. We talk about the pitfalls of ARV, how to make sure you’re doing it the right way, common mistakes we see new investors make, and pretty much just give you a masterclass on all things ARV.
Ashley:
Then we’re going to talk about repairs and maintenance and capital expenditures, what the difference is, what those things are, and different ways to navigate it. Plus, we’ll tell you a couple personal stories of things that are going on with us and especially dealing with it on your…