Internal Rate of Return: Calculating Annual Expected Return

In this Drinks and Deep Dives show, Chelsea Scott joined me to talk about Internal Rate of Return (IRR). This is a powerful but complex metric for calculating annual expected returns. It’s a dynamic way to measure returns because it considers the time value of money (a dollar tomorrow is worth less than a dollar today) and takes into account all cashflow: initial negative cash outlay (down payment), annual cashflows, and proceeds from the sale. Listen to the podcast to find out how to use this calculation to help you decide whether to buy a property in a cashflow or appreciation market.