What is Cash on Cash Return?
Cash on Cash Return measures the annual return on the actual cash you invested in a property. Unlike cap rate which ignores financing, cash on cash includes your mortgage and measures what your money actually earns.
Formula
CoC = (Annual Cash Flow / Total Cash Invested) × 100
Good
6-10% for buy and hold
Great
12%+ or infinite for BRRRR deals
Watch For
Below 4% — a savings account might outperform your investment
Frequently Asked Questions
What is a good CoC for rental property?
A good CoC is 6-10% for buy and hold. A great CoC is 12%+ or infinite for BRRRR deals. Be cautious if Below 4% — a savings account might outperform your investment.
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