Welcome back to 5 Minute Multi-Family. Today we will discuss what Internal Rate of Return (IRR) is and how to calculate it. Internal Rate of Return is a tool used to calculate your overall return from the day you purchase an investment property, to the day you plan to sell that property. Aside from calculating your yearly cash flow, IRR will share with you your overall rate of return as it also includes your estimated sales price at the end of your planned holding period. This is an advanced tool used by savvy investors to understand the overall picture when purchasing a Multi-Family Investment.
5 Minute Multi-Family is a weekly video series where my team and I help you, the investor, understand the major markers of evaluating a multi-family asset. If you missed a prior installment click here to watch those videos now.
In the coming weeks, we will continue to discuss the most common questions we get when it comes to the day to day management of multi-family properties…and tenants!
I hope you have found our video installments informative and helpful! Be sure to forward this video to all landlords that you know, and anyone that could benefit from the information.