How to Calculate Cash-on-Cash Return | Formula & Example

Описание: Wondering how to calculate cash-on-cash return? This metric is one of the most important in the real estate investing game. Not because it tells you whether or not you have a flaming hot deal on your hands, but more importantly whether a property fits within your profit criteria.

As you begin your search for rental properties, you’ll want to have a “screening metric” like cash-on-cash return so you can sift out the deals that fit your criteria from every other property on the market. Thankfully, calculating cash-on-cash return is very simple; all you need is the pre-tax cash flow and the cash you plan to invest in the deal. Divide the two, and you have your cash-on-cash return!

Want Ashley to calculate another real estate metric? Let us know in the comments which ones would help you out!

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0:00 (Cold Hard) Cash-on-Cash Return
0:40 Step 1: Calculate Pre-Tax Cashflow
2:34 Step 2: Divide By Cash Invested
3:23 A Cash-on-Cash Return Example
4:54 When to Use CoC Return
5:44 When You Shouldn't (Only) Use CoC Return