IRR (5-Year)

Internal rate of return accounting for timing of all cash flows over 5 years.

Example Result

Sample Data

-0.91%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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IRR (5-Year) Formula

Discount rate

where NPV of all cash flows = 0 (5-year horizon)

Discount rate

-0.91%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a irr (5-year) of -0.91%. IRR is the gold standard for sophisticated investment analysis. It accounts for initial outlay, annual cash flows, and final sale proceeds, all weighted by timing. Professional investors and institutional buyers use IRR as their primary decision metric.

Where This Value Comes From

IRR (5-Year) is not entered directly — it is calculated from Total Cash Invested. See the formula breakdown above and the detailed inputs below.

Calculated From

IRR (5-Year) is calculated using these inputs:

Total Cash Invested

Total cash committed to the property: closing costs, rent-ready, reserves, and negative cash flow.

$111,163

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Why It Matters

IRR is the gold standard for sophisticated investment analysis. It accounts for initial outlay, annual cash flows, and final sale proceeds, all weighted by timing. Professional investors and institutional buyers use IRR as their primary decision metric.

Detailed Explanation

The Internal Rate of Return (IRR) is the discount rate that makes the net present value of all cash flows equal to zero. Unlike simple return metrics, IRR accounts for the time value of money — when you receive cash flows matters, not just how much.