XIRR vs. IRR In Real Estate Financial Modeling – Don’t Make This Mistake
If you’re a real estate analyst or you’ve done a good amount of real estate financial modeling or real estate financial analysis, you know that the internal rate of return, or IRR, calculation, is an extremely important return metric in real estate financial modeling.
That said, if you’re just using the IRR function, your calculations may not actually be working correctly.
To make sure our IRR calculation is as precise as it can be, we need to use a function called the XIRR function. So what’s the difference between the XIRR and IRR functions, and why does this matter in real estate financial modeling?