Please ensure Javascript is enabled for purposes of website accessibility
Search
Accessibility Menu

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.

Our Guides

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.