Cash-on-Cash Return

Cash-on-Cash Return

A rate of return often used in real-estate transactions. The calculation determines the cash income on the cash invested:

Notes:

For example when you purchase a rental property, you might put down only 10% for a cash down payment. Cash-on-cash return would measure the annual return you made on the property in relation to the down payment.

See also: Actual Return, Excess Return, Expected Return, Real Estate, Return

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Cash-on-cash return

A method used to find the return on investments when there is no active secondary market. The yield is determined by dividing the annual cash income by the total investment. See: Current yield or yield to maturity.