Metrics
Cash-on-Cash Return, explained
Updated 2026-07-02
Cash-on-cash is the return on the real money you sink into a deal (down payment, closing, and rehab) measured against the cash flow it produces in a year. Unlike cap rate, it does account for your financing, which is why it's the number most investors check first.
Cash-on-Cash = Annual Pre-Tax Cash Flow ÷ Total Cash Invested
Cash flow is what's left after all expenses and the mortgage. Cash invested is every dollar you brought to the deal.
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Annual cash flow
Cash invested
Cash-on-cash
,
Target ranges
Good
≥ 12%
Workable
8 to 12%
Below
< 8%
In a BRRRR deal, the refinance can return most of your cash, which sends cash-on-cash sky-high (or to infinity, if you pull it all out). Set your own bar in your buy box.
Related
What is DSCR, and why do lenders care?
DSCR measures whether a property earns enough to cover its own mortgage. It's the number lenders use to decide whether (and how much) they'll lend.
Cap Rate: the unlevered yield
Cap rate is a property's yield ignoring financing, useful for comparing deals and for pricing a future sale.