Metrics
What Is Cash-on-Cash Return?
Cash-on-cash return measures the annual pre-tax cash flow you earn on the actual cash you put into a deal, after financing.
Cash-on-cash = (NOI − Annual debt service) ÷ Total cash invested × 100
Where cap rate describes the property, cash-on-cash describes your position in it after leverage. Total cash invested is your down payment plus closing costs plus any upfront rehab or reserves. Because it depends on financing, creative structures like seller financing move it the most.
Check it on the cash-on-cash calculator.
See it on a real deal
RVP Underwriter computes this from your documents automatically, with every figure shown and sourced. Underwrite a deal free.
Questions
What is a good cash-on-cash return?
Many private investors target 8% to 12% pre-tax on stabilized property, higher on value-add deals. A common screening default is 10%.
Related terms
Part of the RVP Underwriter glossary of income-property underwriting terms. Browse all definitions, or put them to work with the free calculators.