Cash on cash return measures annual cash flow ÷ total cash invested. Unlike cap rate, it accounts for your financing — showing the actual return on the money you put in.
Cash on Cash Return
5.4%
Where Rent Goes
Cash Invested Breakdown
What does this mean?
A 4–8% cash on cash return is solid for most markets. You're earning a reasonable return on your invested capital while building equity through the mortgage paydown.
Keep running the numbers
Smart investors cross-check with multiple metrics before making an offer. Here are a few that pair well with this one.
Calculate the capitalization rate to evaluate a property's potential return based on its net operating income.
Calculate the Debt Service Coverage Ratio to see if a property's rental income covers its loan payments.
Calculate your monthly mortgage payment, total interest, and see a full cost breakdown.
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