WHAT IS CASH-on-CASH RETURN?

How Does It Impact Your Real Estate Portfolio?

One of the most important ways for any investor to measure the profitability of an investment property, is cash-on-cash return.

Let’s look at this deceptively simple metric, how it works, why it’s so important, and how you can start leveraging it to build greater profits in your real estate portfolio.

It is a simple calculation that tells an investor their annual return on a property relative to the amount they invested in the property during that same year.

What Is Cash-on-Cash Return?

It is one of a real estate investor’s primary tools in evaluating whether or not to invest in a property initially.

Where Cash-on-Cash Return Is Most Helpful

To calculate your cash-on-cash return for a property in a given year, simply divide your cash flow by your cash invested

How to Calculate Cash-on-Cash Return

To put a number on it, many investors suggest that a return between 8 and 12 percent is a good target.

What is a Good Cash-on-Cash Return?

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