Cash-on-Cash Return
Also called: CoC Return, Cash-on-Cash
The ratio of annual pre-tax cash flow to the total cash invested in a rental property, expressed as a percentage.
Cash-on-Cash = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
Full definition
Cash-on-cash return measures the annual return on the actual cash you put into a real estate deal — not the full purchase price. Unlike cap rate, cash-on-cash accounts for financing: it uses your down payment plus closing costs as the denominator. A $30,000 down payment on a property producing $3,000 in annual pre-tax cash flow yields a 10% cash-on-cash return. Investors use this alongside cap rate because leveraged deals can have modest cap rates but very high cash-on-cash returns.
Used for
- leveraged real estate investing
- BRRRR strategy analysis
- rental portfolio metrics
Sources
Related SailsAndShore resources
Workbooks
- Real Estate Investor Portfolio · $8.63
Free calculators
- Cap Rate Calculator — Type in the numbers. Get the cap rate. Decide if it pencils.
Free to reference or cite in research and articles. Preferred citation: https://sailsandshore.com/glossary/cash-on-cash-return