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Deal analysisReal Estate IRR Calculator
By Cedrick Reese, Property Rental Calculator
Free tool that calculates your rental deal's IRR and equity multiple instantly, no sign-up needed.
Your investment
$
Down payment, closing costs, and any immediate repairs.
yrs
$
%
$
Sale price minus loan payoff and selling costs.
Advanced: enter each year's cash flow
If the count matches your holding period, these override the Year-1 and growth fields. The sale proceeds are still added to the final year.
Enter your cash invested and a holding period to see the IRR.
Results
Internal rate of return–
Equity multiple–
Total profit–
Payback–
These inputs never turn a profit, so there is no positive rate of return to solve for. The equity multiple and total profit still describe the outcome.
An estimate that is only as good as your projections. It assumes cash flows arrive at year-end. Pair IRR with the equity multiple and cash-on-cash before deciding. Not financial advice.
How to use this calculator
Enter your upfront cash invested, holding period, year-one cash flow, its annual growth rate, and expected net sale proceeds. Use the advanced field to enter each year's cash flow individually if your projections aren't a simple growth rate.
How IRR works, and what it is not
IRR is the single annual rate that makes the present value of all your cash flows equal to zero, in plain terms, the effective yearly return on the money you had at risk. It is more complete than cash-on-cash or cap rate because it weighs the timing of every dollar. But it is not a forecast of your bank balance, and a high IRR over a short hold can mean less total profit than a lower IRR over a long one. That is exactly why the equity multiple sits next to it here: the multiple tells you how many times your money came back, the IRR tells you how fast.
A worked example
Put in $60,000, collect about $6,000 in year one growing 3% a year, and net $90,000 when you sell in year five. Your money more than doubles, an equity multiple around 2.0, and the IRR lands in the high teens. Push the sale further out with the same profit and the IRR falls, because the same gain took longer to earn.
Common questions
How is IRR different from cash-on-cash and cap rate?
Cash-on-cash is a single year's cash flow over your equity, and cap rate is one year's unlevered yield. IRR spans the whole hold, including the sale, and accounts for timing, which the other two ignore. See cash-on-cash vs cap rate vs ROI.
Why does it assume year-end cash flows?
Annual IRR treats each year's cash as arriving at year-end, which is the standard simplification. Real timing is monthly and slightly improves the true return, so treat this as a close estimate.
Why pair IRR with the equity multiple?
Because IRR rewards speed and can flatter a quick flip, while the multiple shows total return. A 2x in three years and a 2x in ten years have very different IRRs but the same multiple. Reading them together keeps you honest.
What is a good IRR?
It depends on the strategy and risk. Stabilized rentals often pencil in the low teens; higher-risk value-add deals target more. There is no universal number, so compare against your own alternatives.
How this is built and kept current
Cedrick Reese, a web developer, built this calculator on the standard discounted-cash-flow method for solving IRR: it finds the single annual rate that sets the present value of every yearly cash flow, plus the sale proceeds, equal to zero, the same definition finance textbooks and real estate underwriters use. The equity multiple and payback figures next to it are checked against that same set of cash flows for internal consistency, so all three numbers always describe the same deal. If a more common way of framing or presenting IRR for rental deals takes hold, this page gets updated to match it.