Question about Appraisals and ARV

[Dave Zarcone]

What big ticket items are inspected by an appraiser and hold the most weight in determining the ARV? If I am using the BRRRR strategy and need the home to appraise as high as possible what items do I absolutely need to rehab in order to receive the highest appraisal?

[Ken Konecny]

An appraiser is going to look at similar income producing properties in the area that sold in the previous six months. The appraiser will evaluate the rents, condition and characteristics of the comps. He then adjusts the comps to best match the subject property. The value is derived from these factors. If all the recent comps were in great condition, had updated kitchens/ bathrooms, granite tops and so on, then you could reasonably expect the value of the subject property to be similar if it also had many of the same characteristics.

In regards to specific items, say granite tops or updated bathrooms, you need to think about your target renter. You also need think about the type of renter that is drawn to live in the neighborhood where your property is located. Are they college students, families, or some other type? What features do your target renters demand most? College students are going to prefer different characteristics in a rental compared to wealthier working professionals and vise versa.