IRR & Equity Multiple Calculator
Model multi-year cash flows and a terminal sale to size up a hold, value-add or development play.
Yearly cash flows
Terminal proceeds are added to the final year's cash flow.
Internal rate of return
14.78%
Equity multiple: 1.90×
About this calculator
This IRR and equity multiple calculator models the full lifecycle of a property investment — the initial equity injection, annual distributions, any capital calls or refinance proceeds, and the terminal sale — and tells you the two return metrics professional investors care about most: the annualised internal rate of return and the total equity multiple.
How the calculation works
IRR is solved iteratively (Newton’s method) as the discount rate that drives the net present value of the cash-flow stream to zero. Equity multiple is the simple sum of all positive cash flows (operating distributions plus net sale proceeds) divided by the sum of all negative cash flows (initial equity plus any capital calls). The terminal sale is calculated as exit value minus selling costs minus loan payout.
Assumptions and limitations
- Annual cash flows only — intra-year timing (monthly distributions) is not modelled.
- Pre-tax — no allowance for capital gains tax, GST or depreciation recapture.
- Exit value and selling costs are user inputs — no growth-rate assumption is baked in.
- Up to 15 hold years are supported.
When to use it
Use this calculator to compare a buy-and-hold investment against a value-add or development play, to decide between a 5, 7 or 10-year hold, or to underwrite a JV deal where you need to show the cash-on-cash, IRR and equity multiple side by side. Pair it with the Residual Land Value calculator if you’re sizing a development site.
Frequently asked questions
- What is the difference between IRR and equity multiple?
- IRR (internal rate of return) is the annualised, time-weighted return on your equity across the hold. Equity multiple is the total dollars returned divided by the dollars invested, ignoring timing. A deal can have a high equity multiple but a mediocre IRR if the cash takes a long time to come back, and vice versa.
- What IRR is considered good for an Australian property deal?
- Stabilised residential investments typically target a 6–10% IRR over a 7–10 year hold. Value-add plays (renovation, repositioning, small-scale subdivision) usually target 12–18%. Ground-up development is often underwritten at 18–25% IRR to compensate for the risk and the time the equity is locked up.
- Why is my equity multiple above 1.0 but my IRR negative?
- It is mathematically impossible for a project to have an equity multiple above 1.0 and a genuinely negative IRR. If you are seeing that, double-check that the initial investment is entered as a negative cash flow and that all distributions and the terminal sale net of selling costs and debt payout are included.
- Does the calculator handle a refinance or capital call mid-hold?
- Yes — enter the refinance proceeds as a positive cash flow in the year received, or a capital call as a negative cash flow in the year required. IRR and equity multiple will both adjust automatically.
- Is IRR the same as ROI?
- No. ROI is typically a single-period or total-return number that ignores when the money comes back. IRR is the discount rate that makes the net present value of all cash flows equal to zero, so it is sensitive to the timing of every distribution.
Estimates are indicative only and intended as a starting point. Actual figures depend on lender policy, market conditions, professional fees, taxes and other costs. Always confirm with a licensed broker, accountant, valuer or solicitor before acting.