Property IRR Calculator
Evaluate your long-term wealth creation potential.
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Annualized Internal Rate of Return
1. The "Initial Outlay" Tip
If you are using a 100% LVR (borrowing the full purchase price), your outlay is only your Stamp Duty and Legal Fees. This is why high-leverage deals often show a massive IRR—you are controlling a million-dollar asset with very little of your own "skin in the game."
2. Net Cash Flow Logic
Don't just enter your rent. Subtract your mortgage interest, property management fees, body corporate, and land tax. If your expenses are $60k and rent is $40k, enter -20000. High IRR properties often start with negative cash flow but end with massive capital gains.
3. Net Sale Proceeds
To get this right, project your property value 10 years into the future (e.g., 5% growth per year). Subtract the original loan amount you still owe the bank and roughly 2-3% for selling commissions. The result is the actual cash that hits your bank account at the end.
4. The "10% Rule"
In the current Australian market, a "Blue Chip" property usually targets an IRR between 7% and 10%. If your calculation shows over 15%, you've likely found a high-growth "hidden gem" or a high-leverage opportunity that we should discuss immediately.
