ERV

Definition

Estimated Rental Value: the projected annual rent a property should command based on comparable properties. It's an estimate, which means it's frequently wrong.

Example Usage

The office building's ERV is $35 per sq ft, making the current $28/sq ft lease look underpriced.

Origin

Commercial real estate valuation terminology

Fun Fact

ERV is a key metric in commercial property valuation and helps investors determine if a property is mispriced.

Source: Royal Institution of Chartered Surveyors

Related Terms

Intermediate

Flipping

Buying a property below market value, renovating it quickly, and selling for profit—ideally within 6-12 months. It's where real estate optimism meets brutal arithmetic.

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Advanced

MAI

Member of the Appraisal Institute—a prestigious professional designation for real estate appraisers. The PhD of property valuation, complete with extensive education and testing requirements.

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Equity stripping

A fraudulent scheme where someone strips a property's equity through inflated refinances or loans, leaving the owner with debt and negative equity.

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Intermediate

ARV

After Repair Value—the estimated market value of a property after renovations are completed, used by flippers and lenders to determine how much to invest. It's the number that makes every renovation look profitable in your spreadsheet, before reality intervenes.

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Beginner

Hazard Insurance

Insurance protecting the property structure against fire, wind, theft, and other physical damage. Lenders require it; it's paid via escrow every month.

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Intermediate

Desk Cost

The overhead expense allocated per desk in a commercial office space, used to determine if hot-desking and flexible workspace makes financial sense.

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