What are the levers to improve IRR?

Here are some key ways to improve the IRR (Internal Rate of Return) of a property:

  • Increase the amount of debt in the deal. It will increase leverage and the pros/cons need to be weighed.
  • Buy at a discount or attractive price. It is important to buy at the early stage of the real estate cycle, if possible.
  • Increase the rental income and/or reduce expenses through tenant improvements or efficiently running operations. For e.g. providing additional amenities.