What is ARV? After repair value explained for Australian flippers

After repair value, or ARV, is the number every flip lives or dies by, and it is the one most beginners get wrong. Your after repair value is your honest estimate of what a property will sell for once the renovation is finished, in today's market, not a hopeful round number you back into so the deal looks good. Get the ARV right and every other figure in the deal has something solid to stand on. Get it wrong and you have built the whole thing on a guess.

ARV is a term borrowed from American flipping, where it is everywhere. In Australia we more often say "end value", "resale value" or "on-completion value", but it means the same thing, and because so much flipping content online is American it is worth knowing the acronym. The part that does not translate is the data. You cannot lift a US rule of thumb onto a Sydney or Brisbane street, because the comparable sales, the buyer pool and the costs are all different here.

What after repair value actually means

ARV is a forward-looking number with two moving parts: the property as it will be after the work, and the market as it is when you sell. It is not what the place is worth today, and it is not what you personally hope to get. It is what a real buyer will realistically pay for the finished product, judged against what similar finished homes nearby have actually sold for.

That distinction matters because your whole deal keys off it. Your maximum offer is worked backwards from the ARV minus your costs and your margin, and the 70% rule is literally a fraction of the ARV. If the ARV is 10% too high, the error does not stay at 10%. It flows straight through to the price you are willing to pay, and it can turn a real margin into a loss without you noticing until the sale.

How to calculate after repair value in Australia

There is no clever formula. ARV is estimated the same way a professional valuer does it: the comparable-sales method. You find recently sold homes that are genuinely like the one you will hand over, and you let their prices tell you what yours is worth.

Done properly it looks like this:

• Pull recent, nearby, settled sales. Valuers typically look at sales within about a 1 to 2 kilometre radius that settled in the last 90 days or so, aiming for at least three genuine comparables and ideally five (Picki). Recent and settled matters. An asking price is a wish, and a sale from a year ago is a different market.
• Match the finished product, not the current wreck. You are pricing the house as it will be after the reno, so your comparables should be homes in the condition yours will end up in, with a similar land size, floor area, bedroom and bathroom count, and car spaces (ProperEasy).
• Adjust for the differences. No two properties are identical, so you nudge up or down for the things buyers actually pay for: an extra bathroom, a bigger block, a better street, off-street parking, aspect and outlook.
• Land on a range, then take the conservative end. Real estimates are a band, not a single magic figure. For a flip you plan around the lower end, because the sale you have not made yet is the one most likely to disappoint.

Where does the sold data come from here? CoreLogic (now Cotality), Domain and realestate.com.au all publish recent sold prices, and REA's PropTrack and CoreLogic run the deeper databases that agents, valuers and brokers pay for (ProperEasy). You can build a workable ARV from the free portals if you are disciplined about picking true comparables. If you want it done in seconds against comps, the ARV calculator and a full FlipPro deal analysis are built for exactly this, and there is a worked sample analysis you can look at without signing in.

The ARV mistakes that sink flips

Almost every blown flip I see traces back to one of these:

• Pricing the dream, not the comps. You fell for the project and quietly assumed top-of-market. If no finished home on that street has ever sold for your number, your number is fiction.
• Using the wrong comparables. A renovated four-bedder two suburbs over is not a comparable for your three-bed cottage. Cross a school catchment, a main road or a suburb boundary and the price rule can change completely.
• Forgetting the ceiling. Every street and every suburb has a price the best house on it still cannot beat. You can over-capitalise on a reno and simply never see the money back, because buyers will not pay beyond what the location supports.
• Ignoring where the market is heading. ARV is the value at sale, months from now. If the cycle is softening, last quarter's comps may already be optimistic. Do not straight-line a rising market you are only hoping continues.
• Counting reno spend as value. Spending $80k does not add $80k. It adds whatever the comparable evidence says the finished home is worth, and not a dollar more. That gap is exactly where your margin lives or dies, so pair your ARV with a grounded renovation cost estimate.

ARV vs a bank valuation: not the same number

People assume the bank's valuation will confirm their ARV. It usually will not, and that surprise has killed plenty of deals at the worst possible moment.

A bank valuation is deliberately conservative. The lender is not trying to capture upside, it is protecting itself against loss if it has to sell in a hurry, so a bank val leans on recently settled comparable sales, applies a risk buffer and often lands below the contract price (Duotax, Finder). Your ARV is a market estimate of the likely sale price of the finished home. Different jobs, different numbers.

Two practical takeaways. First, do not fund a flip assuming the bank will value it at your ARV, because a low valuation can leave you short the cash you counted on. Second, if a bank val comes in unfairly low, you can ask for a review through your lender or broker and put forward stronger comparable sales as evidence (Duotax). Good comps are useful in both directions.

Work out your ARV, then pressure-test the deal

ARV is not the finish line, it is the first honest input. Once you have a conservative, comparable-backed number, run it through the rest of the deal: subtract your purchase costs, the reno, the holding costs and the selling costs, then see whether the margin that is left is worth the risk. That is the whole job, and it is why the ARV has to be right before anything else can be trusted.

If you are new to this, start with the beginner's guide to flipping a house in Australia for how the pieces fit together, and keep the ARV glossary entry handy for the quick definition. When you are ready to price a real one, put your comps into the ARV calculator and let a full analysis carry the number through to your maximum offer. FlipPro covers NSW, VIC and QLD with live zoning data now, so you can run the whole deal, comps and all, before you sign anything.

This is general information only and not financial, valuation or investment advice. Property values move with the market and every deal is different. Estimate your figures conservatively against current comparable sales, and get independent professional advice before you buy.

---