CalculateRealEstateROI

Investing

What is a good cash-on-cash return?

8–12% CoC is healthy in cash-flow markets; 4–7% is normal in appreciation markets. Below 4% requires a clear forced-equity or appreciation thesis.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

8–12% CoC is healthy in cash-flow markets; 4–7% is normal in appreciation markets. Below 4% requires a clear forced-equity or appreciation thesis.

Expanded explanation

Cash-on-cash measures the cash yield on cash invested — the most honest return metric for leveraged real estate. It excludes appreciation and principal paydown, which together can double total return. Target depends on strategy: cash-flow buyers want higher CoC; appreciation buyers accept lower CoC for higher long-term equity growth.

Examples

  • $8k cash flow on $80k invested = 10% CoC.

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