Modified Internal Rate of Return (MIRR)
A more precise alternative to standard IRR. Calculate returns assuming cash flows are reinvested at a specific rate, rather than the IRR itself.
MIRR is generally lower than IRR for successful projects because it assumes reinvestment at a conservative rate rather than the high project yield.
How to Use the MIRR Calculator
In under two minutes you’ll see your MIRR, a side-by-side IRR comparison, a complete capital allocation breakdown, and a full year-by-year cash flow schedule — ready to download as a professional PDF report.
Enter your investment details
Input your total upfront capital, expected annual cash flow from operations or rent, and your planned holding period. Use the range sliders to instantly model different scenarios — adjust purchase price or holding period and results update in real time.
Set your rate assumptions
Provide your finance rate — the cost of your capital, typically your loan rate or required equity return — and your reinvestment rate, the return you realistically expect on positive cash flows between distributions. These two rates are what separate MIRR from standard IRR.
Add your exit and selling costs
Enter your expected sale price at the end of the hold period plus total selling costs as a percentage — agent commissions, transfer taxes, title, and closing fees. The calculator deducts these automatically to show your true net proceeds and their effect on MIRR.
Review results and download PDF
The results panel displays MIRR prominently alongside IRR, net profit, capital allocation bars, and two charts — a cash flow timeline and PV vs FV donut. Download the two-page PDF report to share with equity partners, lenders, or your investment committee.
What This Calculator Shows You
Most online MIRR calculators return a single percentage with no context. This one shows you every number behind the metric — FV of returns, PV of costs, capital breakdown bars, a year-by-year cash flow schedule, and a professional downloadable report built for real-world investment decisions.
MIRR — The Headline Metric
The Modified Internal Rate of Return displayed prominently as your primary output — colour-coded green when positive, red when negative, with your finance rate and reinvestment rate shown in context so the number is immediately interpretable.
Standard IRR Comparison
Side-by-side display of MIRR vs standard IRR so you can see precisely how much IRR overstates returns — and by how many percentage points. The difference quantifies the reinvestment rate assumption built into your deal’s IRR figure.
FV of Returns & PV of Costs
The calculator shows the Future Value of all positive cash flows compounded at your reinvestment rate, and the Present Value of costs discounted at your finance rate — the two inputs that form the MIRR formula, made explicit and auditable.
Full Cash Flow Schedule
A year-by-year table for the entire hold period showing initial outlay, each year’s operating cash flow, and the final exit year with net sale proceeds. Cumulative totals are included so you can track the breakeven point across the hold.
Capital Allocation Breakdown Bars
Proportional bar charts showing your initial investment, total rental income, net sale proceeds, and selling costs as relative shares of capital — making the anatomy of a deal’s return immediately visual and easy to communicate to partners.
2-Page PDF Report
Page 1 covers your full assumptions, 6 result summary cards with colour-coded accents, breakdown bars, and key metrics. Page 2 is the complete cash flow schedule with exit year highlighted in green. Ready to drop into a deal room or investor package.
Why Investors Are Moving From IRR to MIRR
Three Investors Who Should Run This Calculator
MIRR isn’t for every investor on every deal — but for these three profiles, the difference between IRR and MIRR is the difference between a deal that looks attractive and one that actually performs.
You’re buying residential properties to rent for 5–10 years and sell at appreciation. You need a return figure that accounts for where rent income actually gets reinvested — not an inflated IRR that assumes impossible reinvestment rates. Running MIRR with a conservative 4–5% reinvestment rate gives you the number your deal actually delivers, not the number it would deliver in a theoretical world where every distribution gets reinvested at 18%.
- Use current savings or index fund rate (4–6%) as your reinvestment rate for a realistic baseline
- Model holding periods of 5, 7, and 10 years to find where MIRR peaks for your specific cash flow profile
- Run MIRR with conservative 2–3% appreciation before making an offer — if it still clears your hurdle, the deal has margin of safety
- Download the PDF to present returns to equity partners or family investors alongside IRR
You’re renovating underperforming properties, stabilising them, and selling or refinancing at the new value. Capital is expensive — hard money or bridge loans at 10–12% — so your finance rate is high and IRR’s reinvestment assumption is wildly optimistic on short-cycle deals. MIRR with your actual cost of capital as the finance rate gives you an honest go/no-go metric that accounts for the real drag of expensive debt on your annualised return.
- Set finance rate to your hard money or bridge loan rate — not your target return — to correctly capture debt cost
- Use your next deal’s expected cash yield as the reinvestment rate to model realistic capital recycling
- Model 12, 18, and 24-month holds to understand how timeline slippage erodes MIRR on short-cycle projects
- Any positive spread between MIRR and finance rate is accretive — the wider the spread, the stronger the deal
You’re raising capital for multifamily, industrial, or mixed-use deals and need to present returns honestly to limited partners. Institutional LPs increasingly require MIRR alongside IRR because it eliminates the reinvestment rate assumption problem that makes IRR-only marketing materials look better than the underlying economics justify. MIRR is the metric that survives due diligence.
- Present MIRR and IRR side-by-side in the investor deck — proactively showing the gap builds credibility with sophisticated LPs
- Use a conservative 5–6% reinvest rate to model LP-level returns; some capital will sit in distributions before re-deployment
- Download the PDF report as a deal room supporting document — the 6-card summary and cash flow schedule translate directly to investment memo format
- Run sensitivity: model MIRR at 3%, 5%, and 8% reinvestment rates to show the range of outcomes to your investment committee
7 Things Every MIRR User Should Know
MIRR is only as honest as the assumptions behind it. These seven tips will help you input the right numbers, stress-test your deal, and avoid the most common modelling mistakes that lead investors to approve bad deals on paper.
Always compare MIRR to your finance rate — not to a generic benchmark
The most important question is whether MIRR exceeds your specific cost of capital. If your finance rate is 7% and MIRR is 10%, you’re creating 300 basis points of value. If MIRR is below your finance rate, the deal destroys value regardless of how strong the IRR looks. This spread — not the MIRR number in isolation — is the real go/no-go metric.
Run three reinvestment rate scenarios: 3%, 6%, and 10%
Model MIRR at a conservative rate (3–4%), a moderate rate (6–7%), and an optimistic rate (10%). The spread tells you how sensitive your returns are to where surplus cash lands. A wide MIRR range signals significant reinvestment risk — worth discussing explicitly with your equity partners before signing term sheets.
Never under-estimate selling costs — model 7% as your base, 9% as your stress case
Investors routinely model 5% selling costs and face 7–8% at exit. Residential commissions, transfer taxes, title insurance, attorney fees, and buyer concessions add up fast. A 2% miss on a $1M exit is $20,000 of MIRR-eroding cost. Always use conservative estimates — optimistic exit assumptions are the single most common reason deals underperform investor projections.
Use MIRR alongside equity multiple — they answer different questions
MIRR tells you annualised return efficiency; equity multiple tells you total dollars returned. A 5-year hold with MIRR 12% and 1.8× EM is very different from a 10-year hold with the same MIRR but 2.5× EM. Use both metrics together when comparing deals of different durations or capital structures — MIRR alone can make a short, low-multiple deal look better than a longer, higher-multiple one.
Stress-test your exit price heavily — it’s the biggest MIRR driver
Sale price is the dominant variable in MIRR for most hold periods. Try running the calculator at your base case, then a 10% haircut, then a 20% haircut on the exit price. If MIRR stays above your hurdle rate in the 20% downside scenario, you have a genuinely resilient deal. If it goes negative at a 10% haircut, you’re betting heavily on a single appreciation assumption.
Match the finance rate to your actual cost of capital — not your target return
If you’re using a DSCR loan at 7.5%, use 7.5%. If you’re buying all-cash and your opportunity cost is 8% (your alternative investment return), use 8%. Using the wrong finance rate is the most common MIRR modelling error — it misstates the PV of costs and produces a MIRR that cannot be used for capital allocation decisions. The finance rate is not a preference; it’s an economic fact specific to your capital structure.
Enter net operating income — not gross rent — as your annual cash flow
Annual cash flow in this calculator should reflect NOI after all operating expenses, not gross rent collected. Factor in vacancy (5–8%), property management (8–10% of collected rent), maintenance reserves ($100–150/unit/month for residential), insurance, and property taxes before entering the figure. Using gross rent overstates cash flows, inflates FV of positives, and produces a MIRR that cannot be achieved in practice.
Frequently Asked Questions
Everything you need to know about how MIRR works, how this calculator models it, and how to interpret the numbers in the context of a real investment decision.
For informational purposes only. All MIRR and IRR calculations assume constant annual cash flows, a single lump-sum initial investment, and a defined terminal exit value net of selling costs. Actual investment returns depend on market conditions, operating performance, financing terms, tax treatment, timing of distributions, and factors not captured in this model. MIRR results are highly sensitive to the reinvestment and finance rate inputs — small changes in these assumptions can meaningfully alter the output. This calculator does not account for leverage effects beyond the finance rate, tax implications, depreciation, or partial-period cash flows. Always consult a licensed financial advisor, CPA, or real estate professional before making any investment decision. HomeExpertly is not a licensed broker, lender, or investment advisor.