ROI & IRR property calculator
Professional financial metrics for Czech property investments.
Investment parameters
Same inputs as the investment calculator, but output focused on ROI/IRR/NPV.
15 % is the individual standard — on the difference between rent minus deductible expenses. 0 % for specific exemptions. 21 % for s.r.o. (LLC) and similar.
Financial metrics
ROI, IRR and NPV — what they mean and how to interpret
For serious investment analysis, gross yield isn't enough. This calculator computes three core financial metrics: IRR (internal rate of return), NPV (net present value), and ROI (return on investment).
IRR — internal rate of return
IRR is the annual return your project earns after accounting for all cash flows in time (initial investment, yearly cash flow, exit proceeds). If IRR = 8 %, your money is growing at 8 % per year.
In current Czech Republic: IRR 6–8 % is a good property investment, over 8 % is excellent. If IRR < mortgage rate (4.4 %), leverage is working against you — you're paying more for borrowed money than you earn from the deal.
NPV — net present value
NPV discounts all future cash flows to today's value at your chosen rate (the discount rate). If NPV > 0, the project beats your alternative. If NPV < 0, your alternative (e.g. an equity portfolio at 7 %) is better.
Discount rate should reflect your best alternative. For passive investors 5–7 % (deposits + bonds), for active investors 7–10 % (equity market). Use 7 % as a reasonable default if unsure.
ROI — return on investment
Total ROI = (total gain / invested capital) × 100. Annualized ROI is the geometric mean — what the project earns per year. For a 10-year horizon, annualized ROI is more comparable to other investments than total ROI.
Decision rule
- IRR > required return + 2 % → attractive investment, clear margin of safety
- IRR ≈ required return → marginal — weigh the risks carefully
- IRR < required return → your alternative is better; skip this deal
What people ask most
What's the difference between IRR and ROI?
ROI is total return (gain / invested × 100) regardless of time. IRR is annualized, accounting for when cash flows arrive. IRR is more relevant when comparing investments with different horizons — 100 % ROI over 10 years (~7 % IRR) is worse than 50 % over 3 years (~14 % IRR).
What discount rate should I use?
Use what you'd earn from your alternative. For passive investors 5–7 % (state bonds + safe funds). For active investors with diversified portfolio 7–10 % (equity market historically gives ~8 %). Conservatively use 7 %.
What is negative cash flow and when does it happen?
Negative cash flow = you put in more than you earn each year (typically due to low rental yield or high mortgage payment). Not necessarily bad if appreciation makes up for it. But it means you need another income source to cover the gap.
What is payback period?
The time it takes for cumulative cash flow from the investment to recover your initial investment. For Czech property typically 8–15 years (without counting capital appreciation).
Can I use this calculator's results for tax filing?
No, this is a simplified model for investment decision-making. For tax filing use actual accounting and consult a tax advisor. The calculator helps decide whether to invest — not how to file.
Why does my IRR change so much with the exit year?
Because property investment is heavily back-loaded — most of the return comes at sale (capital appreciation + mortgage paydown). Selling 1 year too early can drastically reduce IRR. Try a few exit-year scenarios to see sensitivity.
Want a simpler view?
Start with rental yield — just 4 numbers and you see gross and net yield.
Rental yield →