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What Does Cash-on-Cash Return Mean?

By Adam Levy – Updated Oct 23, 2024 at 9:55AM

Key Points

  • Cash-on-cash return measures the rate of return on cash invested in a property, focusing purely on cash flows.
  • It's calculated as annual pre-tax cash flow divided by total cash invested for a given year.
  • A good target for cash-on-cash return is at least 8%, compared to higher historical S&P 500 returns.
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