Deal Metrics
What is cash-on-cash return?
See how cash-on-cash return connects annual cash flow to the actual capital you put into a deal.
Answer
Cash-on-cash return tells you how hard your invested cash is working.
Formula: Cash-on-Cash Return = Annual Cash Flow ÷ Total Cash Invested
Example: Down payment = $40,000 Closing costs = $6,000 Initial repairs = $9,000 Total cash invested = $55,000 Annual cash flow = $3,600 Cash-on-cash return = $3,600 ÷ $55,000 = 6.5%
Why this matters: This helps you compare how efficiently your upfront cash is earning income. Two deals can have the same cash flow but very different cash required; this metric makes that clear.
Related guides
Related questions
See how this plays out on a real deal
DealPrism helps you connect the concept to live property assumptions, scenario changes, and calculated outputs.
Analyze your own dealDealPrism provides educational analysis based on available data and user assumptions. Results are estimates and may change if rent, taxes, insurance, financing, or other inputs are updated. This content is not financial, legal, tax, or investment advice.