Real Estate & Investing
Cash-on-Cash Return
Definition
A real estate investment metric that measures annual pre-tax cash flow relative to the total cash invested. Unlike cap rate, cash-on-cash return accounts for mortgage financing. Calculated as Annual Pre-Tax Cash Flow divided by Total Cash Invested (down payment plus closing costs plus repairs). A property generating $6,000 in annual cash flow on a $50,000 total cash investment yields a 12% cash-on-cash return. This metric helps investors compare the return on their actual cash outlay across different investment opportunities.
Related Templates
These SheetCraft templates use or relate to Cash-on-Cash Return:
- Rental Property Analyzer, Evaluate rental deals with cap rate, cash-on-cash return, and 10-year cash flow projections, plus a multi-property portfolio tracker.