IRR (Internal Rate of Return)

The internal rate of return (IRR) is the annualized return of the entire investment over time: what you put in, every year's cash flow, the loan paydown, and what you walk away with at the sale, all discounted onto one timeline.

Cap rate is a snapshot; cash-on-cash is a year; IRR is the whole movie.

Why investors use it

IRR lets you compare a rental property against anything else you could do with the money: another property, an index fund, a bond ladder. If a deal projects a 29.4% ten-year IRR and your alternative is 10%, the spread is the argument.

Hold period

Your hold period is the length of time you plan to own the property, from purchase to sale. IRR is always computed over a hold period; change the horizon and the answer changes, because it moves when the sale proceeds land on the timeline.

Where you'll see it in Rescover

Every Rescover analysis projects IRR over your hold period using your assumptions (rent growth, appreciation, sale costs), all editable. The wealth projection even benchmarks the deal against the S&P 500 so the "or I could just buy stocks" conversation has numbers in it.