Cash-on-Cash Return
Annual cash flow ÷ total cash invested (down payment + closing + rehab). Tells you how hard your money is working.
There is no universal target. Set a criterion that fits the strategy, financing, liquidity, and risk constraints, then verify every cash-flow and cash-invested input.
Metrics
How it's calculated
CoC = Annual Cash Flow ÷ Total Cash Invested
Example
If you put $80,000 down on a $400,000 property and collect $8,800/yr in cash flow, your CoC is $8,800 ÷ $80,000 = 11.0%.
Why Cash-on-Cash Return matters
Cash-on-cash incorporates modeled financing and cash invested, while cap rate excludes financing. Review it alongside cash flow, DSCR, risk, and the evidence behind the inputs rather than optimizing one metric in isolation.
Related terms
- Cap Rate
- Net Operating Income ÷ property value. The unleveraged return a property generates, independent of f…
- Monthly Cash Flow
- Rent minus operating expenses minus mortgage payment. The cash that lands in your account each month…
- IRR (Internal Rate of Return)
- Annualized return over the full hold period, including cash flow, principal paydown, appreciation, a…
- DSCR (Debt Service Coverage Ratio)
- Net Operating Income ÷ mortgage payment. Measures whether the property's income comfortably covers d…
Where Cash-on-Cash Return shows up in TrueCap
The analyzer computes this metric on every run from the assumptions you see and can edit, and shows it in the results view.