Cash-on-Cash Return

Cash-on-cash return is your annual cash flow divided by the cash you actually invested: the down payment, closing costs, and any up-front repairs. Where cap rate describes the property, cash-on-cash describes your deal, because it includes your financing.

cash_on_cash = annual_cash_flow / cash_invested
annual_cash_flow = NOI - debt_service

Put $25,000 down on a property that clears $5,675 a year after the mortgage, and your cash-on-cash return is 22.7%.

Leverage cuts both ways

Financing can lift cash-on-cash far above the cap rate, or drive it negative: in many markets the median listing has negative cash-on-cash at today's rates. That's not a reason to skip the metric; it's the reason to check it before you offer.

Where you'll see it in Rescover

On every analysis, next to cap rate and IRR, computed after tax where it matters. Blue Chip criteria commonly set a cash-on-cash floor, so listings that can't clear it never make it to your screen.