Definition
Annual pre-tax cash flow divided by the total cash invested, measuring return on the money actually put into a deal.
Example
$8,400 of annual cash flow on $96,000 invested is an 8.75% cash-on-cash return.
Related terms
Frequently asked questions
What does Cash-on-Cash Return mean in real estate?
Annual pre-tax cash flow divided by the total cash invested, measuring return on the money actually put into a deal.
How is Cash-on-Cash Return used in practice?
$8,400 of annual cash flow on $96,000 invested is an 8.75% cash-on-cash return.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.