What does "rehab appraisal" mean?

A "rehab appraisal" refers to an assessment estimating the value of a property after renovations have been made. This type of appraisal takes into account the improvements and enhancements that will be completed, allowing potential buyers or lenders to understand the future value of a property once the renovations are finished.

This appraisal is particularly useful for investors or prospective homeowners looking to purchase a distressed property, as it provides insight into how much the property could be worth after being improved. By comparing the current state of the property with the expected post-renovation condition, appraisers assess how the proposed changes will impact overall value.

The other options do not accurately capture the essence of a rehab appraisal. For instance, estimates based on current conditions do not account for potential value increases due to renovations. Similarly, valuations done prior to repairs do not reflect the property’s anticipated worth post-renovation. Lastly, an appraisal that only considers land value overlooks the improvements to the structure and potentially misrepresents the comprehensive value a rehab appraisal seeks to provide.