What is Internal Rate of Return (IRR)?

Internal Rate of Return (IRR) is a metric used to estimate the profitability of an investment. Internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

For commercial property, IRR is the rate of return on a property investment from the time of investment to the sale of the asset, incorporating periodic cash flows and a terminal distribution.