cash-on-cash return


Also found in: Acronyms.

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.

Cash-on-Cash Return

A way to calculate the rate of return on an investment, especially in real estate. One calculates the cash-on-cash return by dividing the cash inflow on the investment in a given year by the cash outflow originally made. For example, if one buys a property for $100,000, this amount is the denominator when calculating the cash-on-cash return each year.

cash-on-cash return

See cash-on-cash.

References in periodicals archive ?
For the mortgage itself, prices now range from 60 to 80 percent of face amount, with most investors demanding a front end cash-on-cash return of at least 9 percent and requiring a relatively quick exit strategy of 1 to 3 years through the refinance of the underlying mortgage to a third party lending institution.
Conversely, if the apartment generates a significant positive cash flow, the asset is priced at 6 to 8 percent actual cash-on-cash returns, with the residual value of the apartments as an additional return to investors or up to 35 percent of market value.
Rents were rising, and buildings purchased in the late 1970's were showing cash-on-cash returns far better than those of stocks and bonds.