Annualized return across your holding period
For long-term investors calculating IRR: the annualized return over a projected hold period accounting for all interim and exit cash flows.
Internal Rate of Return (IRR) Calculator
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Create Free AccountWhat it does
The IRR Calculator computes the annualized internal rate of return across your entire investment period by accounting for every cash inflow and outflow — initial capital, monthly cash flow, loan paydown, and exit proceeds. Unlike simple return calculations, IRR weights timing of cash flows so deals generating returns early rank higher than identical returns arriving late.
IRR is the gold standard for comparing investments across different hold periods, financing structures, and market conditions because it standardizes all returns into annual percentages. A 20% IRR over 5 years outperforms a 22% return over 10 years, and the IRR calculation reveals the distinction instantly.
Who it's for
- Institutional investors comparing real estate returns to stock market returns and alternative investments
- Syndicators modeling returns for investor presentations and validating deal hurdle rates
- Private equity real estate managers evaluating fund performance and capital allocation decisions
- Wealth managers calculating real estate's contribution to blended portfolio returns
How it works
Input all cash flows
Year 0: purchase and initial investment. Years 1–N: annual cash flow or distributions. Year N: sale proceeds.
Set holding period
3–10 years typical.
Calculate IRR
The rate that makes PV of all flows = 0.
Why it matters
Compare multi-year deals on equal footing
Account for timing of capital and distributions
Show investors the true magnitude of returns
Justify longer holds for value-add deals
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Conservative, base, and optimistic 1/2/5/10-year return modeling.
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Mortgage rate fields pre-populate with Federal Reserve interest rate data.
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Every formula audited against professional underwriting standards.
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Frequently asked questions
How does IRR differ from cash-on-cash return?
Cash-on-cash is year-1 return; IRR accounts for all years and the timing of capital. A 5-year hold with growing cash flow shows higher IRR than year 1 COC.
What IRR should I target?
15–25%+ for fix-flips; 8–15% for buy-and-hold rentals; 12–20% for value-add multifamily. Depends on risk and market.
How does exit timing affect IRR?
Hugely. A property that takes 10 years to appreciate may show 8% IRR; sell in 5 years, IRR may drop. Model exit timing carefully.
Should I include refinance proceeds in IRR?
Yes, if you're modeling a BRRRR or cash-out refi. It's a cash flow event that affects returns.
Is this calculator free to use?
Yes — create a free Investor Starter account to run 1 calculator per day. No credit card required. Upgrade to Core ($49/mo) for unlimited access to all 67 calculators.
How accurate are the results?
Results are only as accurate as your inputs. The formulas use industry-standard real estate investment math. Always verify with a licensed professional before committing capital.
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