CalculateRealEstateROI

ROI Metrics

Internal Rate of Return (IRR)

The annualized discount rate that sets the NPV of all deal cash flows to zero.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

The compounded annual return that accounts for when cash arrives — early cash flow worth more than late.

Examples

  • A flip returning 30% in 9 months has higher IRR than a rental returning 30% over 5 years.

Common mistakes

  • Reporting IRR without holding period.
  • Comparing IRR on deals with very different durations.

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