InvestingAll terms starting with C
Cash-on-cash return
Also called: coc, cash on cash
Annual pre-tax cash flow divided by the cash you actually invested, measuring return on money out of pocket.
Cash-on-cash divides the year’s cash flow after debt service by total cash invested: down payment, closing costs, and upfront work. Unlike cap rate, it accounts for leverage.
It measures only cash flow. It ignores principal paydown, appreciation, and tax treatment, so it understates total return on a leveraged hold.
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Related terms
- Cap rate (Capitalization rate)Net operating income divided by property value, the unlevered yield used to compare properties.
- Cash flowWhat remains each month after rent has covered operating expenses and debt service.
- ROI (Return on Investment)Total return relative to what was invested, usually including cash flow, principal paydown, and appreciation.
- LeverageUsing borrowed money to control a larger asset, amplifying both returns and losses.
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