After Renovation Value: What It Means and Why It Matters

Many revamp their houses to enhance the beauty and functionality of their spaces. Others start a renovation to improve their property’s marketability. To ensure your project’s success, you must carefully plan it and work with a reliable home renovator. Another thing you should do is consider your home’s after renovation value (ARV).

Read on to learn what after ARV is and why it matters.

What Is After Renovation Value (ARV)?

ARV is the projected market value of a property following renovations. This figure reflects a home’s potential worth after significant improvements, such as a new kitchen, upgraded bathroom or expanded living space. Your general contractor might calculate ARV to gauge the financial feasibility of a renovation and its impact on the property’s marketability.

Why Does ARV Matter?

ARV is a measure for determining borrowing power when applying for renovation loans. Lenders often reference ARV to determine the loan amount, ensuring it aligns with the future value of the updated property. It can help you estimate your return on investment (ROI), which is helpful if you plan to sell your home.

How Do You Calculate Your Home’s ARV?

To calculate ARV, you must know your home’s current value, the cost and scope of proposed renovations, and how these improvements align with local real estate market trends. Simply add your property’s current value and the renovation’s cost to derive the ARV. However, achieving an accurate estimate involves considering local comparable properties, getting professional appraisals before and after construction, and meticulously assessing the cost-value relationship of each upgrade.

Moreover, ARV alone doesn’t determine your project’s success. Personal enjoyment, increased functionality and enhanced living conditions also play a substantial role. The value of a renovation usually transcends monetary returns, especially for those intending to enjoy their upgraded spaces for years to come.

Let’s Start a Conversation!

A reliable home remodeler will go above and beyond to help you achieve your project’s goals. At DreamMaker Bath & Kitchen of Wilmington, we’re dedicated to elevating the beauty and functionality of your living spaces. Call us at (910) 928-2207 or complete our online form to reach our design experts. We serve homeowners in Port City, Forest Hills, Leland, Pine Valley, Carolina Beach and surrounding communities.

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