Cash-on-Cash Return

Category: finance

A rate of return that calculates the cash income earned on the cash invested in a property.

If you put a $100k down payment on a $1M property and pocket $10k in profit the first year, your cash-on-cash return is 10%. It ignores the total property value and focuses purely on what your liquid capital is yielding right now.

Common Examples

• The syndication promises an 8% cash-on-cash return distributed to investors through quarterly dividend payouts.
• While the cap rate was low, the high leverage allowed the sponsor to achieve a very attractive 12% cash-on-cash return.