Resources - Financial Terms

Cash-on-Cash return is a percentage that measures the return on cash invested in an income-producing property. It is calculated by dividing before-tax cash flow by the amount of cash invested.

Cash-on-Cash return is used to evaluate the profitability of income-producing properties. It only considers before-tax cash flow and doesn't take into account an investor's individual income tax situation.

If before-tax cash flow for an investment property is equal to $10,000 and your cash invested in the property is $100,000, Cash-on-Cash Return is 10%.