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![]() ![]() The CoC return metric is expressed as a percentage, which makes comparisons across different property investment opportunities easier. While the numerator is pre-tax, the metric is calculated post-financing, so the annual cash flow is a “levered” metric. the equity contribution.Ĭash on Cash Return (CoC) = Annual Pre-Tax Cash Flow ÷ Invested Equity The formula for calculating the cash on cash return involves taking the annual pre-tax cash flow and dividing it by the initial cash investment, i.e. In practice, the return metric estimates the annual yield received by an investor on a specific property relative to the amount paid in the corresponding year, e.g. ![]() the outlay of cash on the date of purchase. Invested Equity: The initial equity investment, i.e.Annual Pre-Tax Cash Flow: The annual pre-tax cash income generated on the property investment.The cash on cash return is calculated as the ratio between: The cash on cash return, or “cash yield”, measures a real estate investor’s annual pre-tax earnings on a property relative to the initial amount spent to purchase the property itself. How to Calculate Cash on Cash Return (CoC)? The Cash on Cash Return (CoC) is a real estate metric comparing an investment property’s pre-tax cash flows to the initial equity investment. ![]()
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