The internal rate of return (IRR) on an investment is the percentage rate earned on each dollar invested for each  period it is invested.

The IRR gives investors the means to compare alternative investments based on yield.  The IRR has become the corner stone method for investment analysis, performance and selection.  It is a very good measure but it must be used in conjunction with other measures.

The IRR is a fairly straightforward measure of annualized yield on each dollar invested for the time period that the investment remains in the investments.  There are some limitations.  One of them is that the IRR makes no assumptions about the reinvestment of periodic cash-flow.

There is more to the IRR then discussed here, but for simplicity sake its a more accurate and informative measure then cash on cash or the very simple and overused CAP rate.

Should you have more questions about the IRR or investing in Phoenix real estate or income properties and measuring investment alternatives call me, Artur at 602-861-3300 (office)