Annual % gain on investment property

Question

I am trying to figure out the annual rate of return after sale of an investment property I purchased in January 2005.

Purchase price was 380k. I had an 80k deposit and put the remainder 300k on an interest only mortgage. Through the years I also had to pay annual council and water rates (total 30k) giving a total of 110k I'd sunk into the property of my own money.

Almost 15 years later I sold the property for 700k. My total gross return was 700k - 269k (mortgage reduced somewhat since rental income at times exceeded interest) - 34k (tax on sale) = 397k.

Is working out annual rate of return on this investment as simple as using the xirr function in excel?

Did I really make a 10% annualized rate of return or have I got this completely wrong?

Answer 1

Yes, it really is that easy. I solved it in numpy, and got a slightly different answer, $9.978973\%$. I don't really know which is more accurate, though my gut feeling is to trust numpy before excel.

import numpy as np
p= np.array([813]+list(range(14,28))+[-3970])
i = np.roots(p)[-1] - 1
print(i)

(I experimented, and found that the lone real root comes last in the list.)