What is a good cash on cash return?
- Thread starter Ace
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Rick_Grimes
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A “good” cash-on-cash return usually depends on the market, but most investors aim for around 8–12% as a solid range; anything above that is generally considered strong, especially for rental properties. In hotter or riskier markets, you might see higher numbers, but they often come with more uncertainty, so personally I’d treat ~10% as a practical benchmark that balances return and risk.
The acceptable rate of cash-on-cash return in real estate investments should be between 8% to 12%, although the acceptable percentage will depend on risk factors. Some lower-risk investments may consider a return rate of between 6% and 8%. The cash-on-cash return evaluates the percentage return of cash investment in one year before tax payments.
A good cash on cash return really depends on the specific investment and market, but generally, a strong return is considered to be around 8-12 percent. This means that for every dollar you invest, you can expect to get 8-12 cents back in cash flow annually. Of course, some investors might be happy with lower returns if the investment is relatively stable and low-risk, while others might be looking for higher returns to compensate for higher risk. For real estate investing, 10 percent is often cited as a benchmark for a solid cash on cash return, but it's essential to do your research and consider factors like property type, location, and market conditions to determine what's a good return for your specific investment.
A good cash-on-cash return typically ranges from 8% to 12% annually, depending on market conditions and risk level. Higher returns may indicate better performance, but investors should also consider property location, expenses, financing terms, and long-term growth potential before deciding.