Cash-on-cash return
Yearly pre-tax cash flow divided by the cash you actually put in, such as the down payment, closing costs and rehab. It shows the return on your own money when using a loan.
Also called: CoC, cash on cash, CoC return
Related terms
The money left each month after collecting rent and paying all expenses, including the mortgage. Positive cash flow means the property pays for itself with some left over.
Net operating income divided by the property's price or value. It shows the yearly return before financing and is used to compare properties and estimate value.
The total gain on an investment compared with what it cost, usually as a percentage. For real estate it can include cash flow, appreciation, loan paydown and tax effects.
Using borrowed money to buy more property than you could with cash alone. It can raise returns when values and rents rise and magnify losses when they fall.
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.