Internal Rate of Return – An Investor’s Best Friend
In a hurry:
Apply it today:
The average, annual rate of return of an investment over a certain period of time
Accounts for leverage, timing and magnitude of cash flows
By the end of this video you’ll learn:
What is IRR?
How do you calculate it?
How is it applied?
Typical errors, how to solve them and other points to keep in mind.
Have a few minutes:
A good friend will keep you out of trouble. A good friend will tell you a good story. A good friend will help you make tough choices.
Internal Rate of Return (IRR) is the commercial real estate investor’s best friend. The IRR is a measure of the average, annualized rate of return of an investment over a certain period of time. It tells a story of how the investment is scheduled to perform and is invaluable when used to compare investment alternatives.
Understanding and applying IRR gives investors insight into a property’s risk and return, underlying investment strategy and so much more.
In this episode we define what IRR is, how it’s applied and important points to keep in mind when using it.