IRR (Internal Rate of Return) accounts for when money goes in and comes out —
making it the most accurate way to compare investment property returns. It asks: what annual return
would make the NPV of all cash flows equal zero?
Cash-on-Cash is simpler: annual net cash flow ÷ total cash invested.
Cash-on-Cash is simpler: annual net cash flow ÷ total cash invested.
PV Initial Cash Investment (negative)
Down Payment
$
Closing Costs
$
Upfront Improvement Costs
$
Total Cash In (PV)
($
112,000
)N Holding Period
How long will you hold the property?
years
Holding Period in Months (N)
84
monthsExpected Annual Home Appreciation
%/yr
Purchase Price
$
PMT Monthly Cash Flow
Monthly Gross Rent
$
Monthly Mortgage Payment (P&I)
($)
Monthly Operating Expenses Taxes, insurance, maintenance, vacancy reserve
($)
Monthly Rent Growth Rate Annual %, optional
%/yr
Monthly Net Cash Flow (PMT)
−$200
FV Net Sale Proceeds
Projected Sale Price
$
526,834
Costs of Sale (agent fees, title, etc.)
%
Sale Costs Amount
($
31,610
)Remaining Mortgage Balance at Sale Leave 0 if paying cash or manually entering
($)
Net Proceeds to Investor (FV)
$
225,224
PV = −$112,000 (total cash in at purchase)
PMT = −$200/mo (monthly net cash flow over hold period)
N = 84 months (holding period)
FV = +$225,224 (net proceeds at sale)
IRR = calculating…
PMT = −$200/mo (monthly net cash flow over hold period)
N = 84 months (holding period)
FV = +$225,224 (net proceeds at sale)
IRR = calculating…
Annual IRR
—%
Internal Rate of Return
Cash-on-Cash Return
—%
Year 1 annual cash flow ÷ cash in
Total Cash Flow
—
Over 7-year hold
Good Return
This investment performs above typical bond yields and many REIT alternatives.
—%
annual IRR
Full Return Breakdown
Total cash invested (PV)
($
112,000
)Total rent collected over hold period
$
201,600
Total expenses paid (mortgage + ops)
($
218,400
)Net operating cash flow over hold
—
Net sale proceeds (FV)
$
225,224
Total Profit (net of all cash flows)
—