Cash-on-Cash Return
Annual pre-tax cash flow / cash invested with bands and payback-period years.
Example
You enter
- Cash invested ($, down + closing + rehab) 75000
- Annual pre-tax cash flow ($, can be negative) 6750
You get
- Cash-on-cash return (%) 9%
- Payback period (years to recover cash invested) 11.111
Checked against published worked examples from: Standard rental-RE investor practice (public).
Details, formula, and sources
ScopeCommon rental and flipping check.
Formula or tablecash_on_cash_percent = annual_pretax_cashflow / cash_invested * 100. payback_years = cash_invested / annual_pretax_cashflow (when positive).
Source and editionStandard rental-real-estate / investment-property metric. Common across BiggerPockets-era investor practice and small-balance lending.
Free accessPublic reference; no specific publication required.
What governsEstimate. Lender governs final underwriting and rate / fee disclosure. Appraiser governs the appraised value. State law and the agency's program guidelines may impose stricter limits than the published thresholds.
API field namescash_invested, annual_pretax_cashflow, cash_on_cash_percent, payback_years
- Cash invested down payment + closing costs + immediate rehab; excludes hold-period capexconvention
- Cash flow annual pre-tax; user computes from rents minus PITI minus opex minus capex reserveconvention