The Internal Rate of Return (IRR) is a crucial metric in real estate investment as it provides an estimate of the profitability of the investment. It represents the annual return that is expected from the investment. A high IRR indicates a potentially profitable investment. However, it's important to compare the IRR with the initial investment to ensure that the expected return is higher than the initial amount invested. It's one of the key metrics, along with Cash-on-cash yield, Liquid-on-cash yield, wealth gains per year, and a projected sale price, used to evaluate the viability of a real estate investment.
Need to compare real estate investment opportunities? Use the Residential ProForma spreadsheet to qu...
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