How this calculator works
The addition method separates renovation cost from the value a buyer might pay for the improvement. Comparable-area mode applies a supported local sale price to the property floor area. The purchase rule is an editable budgeting assumption, not an appraisal standard. The simple return excludes financing, holding costs, taxes, selling costs and unexpected work.
Formula
ARV = current value + renovation value added, or comparable price per square metre × area. Maximum bid = rule percentage × ARV - repair cost. Simple return = (ARV - purchase price - repairs) / (purchase price + repairs).
Worked example
A $250,000 property with $50,000 of added market value has a $300,000 ARV. A 70% purchase rule and $30,000 repairs give a maximum bid of $180,000. At that bid the simple pre-cost return is $90,000 / $210,000 = 42.86%.
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Frequently asked questions
Does spending $50,000 add $50,000 of value?
Not necessarily. Enter the market value added, supported by comparable renovated sales, separately from the repair budget.
Is 70% a lending rule?
No. It is an illustrative investor budgeting assumption. Change it to reflect the project and include omitted costs separately.
Can the maximum bid be negative?
Yes. That indicates repairs alone exceed the chosen share of ARV; it does not imply a seller will pay you to buy.