How accurately are investors calculating After Repair Value?

  11-03-2018
  aseel@uniqueproperties.ae (Aseel Lulu)
How accurately are investors calculating After Repair Value?

So many investors are undermining renovation costs and calculating their property’s After Repair Value (ARV) the wrong way, and due to that a lot of their profits are deteriorating. For those investors who are ready to make the change and transform their losses into earnings, should approach the Market by either hiring an appraiser or a realtor to do a Comparison Market Analysis (CMA) on the assumption that all improvements have been already made to the property. 
ARV is the anticipated value of a property once fixes and developments have been made to it. With several factors affecting ARV calculations, determining its current value and repair costs as well as estimating renovation values are what’s necessary to figure out what the property purchase price and value of repair are.
Finding a realtor isn’t the issue, but finding a good reliable one is where things get tricky. Choosing a trained, right realtor whose client motivated with reputable market experience will provide you with an accurate ARV.
For instance, having an agent who knows the real estate market and the current buying or selling situation of the properties to an extent of how it would impact the investor.

The investor can estimate After Repair Value accurately by going through this following process:

1. Examining and reviewing the information about the property that is intended to be purchased.
2. Reviewing comparable properties.
3. Comparing comparable properties with the property that the investor wants to purchase. 

Amongst figuring out what the property purchase price and value of repairs may be, comes the reform stage, and that is where the Return on Investment (ROI) gets higher, which also comes with higher risks. Many investors have encountered real difficulties in obtaining land plots for limited supply, while large areas remain untapped, even though these actions and procedures have tried to encourage private national investment or foreign direct investment.

Therefore, investors will need to closely observe the methods and procedures used to report estimated costs and revenues as these new revenue-recognition standards are adopted and implemented.

Dubai is entering into a stage of comprehensive modifications aimed at reviving the economy and eliminating its internal and external imbalances. In addition, Properties have been developed to prepare for the transition to a market economy by issuing new and modified growth, for the success of this specific process, with the hope of bringing instability and foreign investors. 

In conclusion, being able to calculate the After Repair Value accurately benefits both local and international investors. the practical way to achieve strategic policy for major institutions Is usually significant when compared to joint ventures, as these types of projects make a constructive contribution to technological modernization on a large and effective scale in Dubai.

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