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The Cash on Cash Return Graphic displays the investor's Before and
After-Tax Cash on Cash return for years 1 through 10.
The cash on cash return is one of the most important real estate
ratios since it establishes the immediate viability of your income
property investment. To learn more about Cash on Cash Return,
visit our Advanced Topics section.
Cash
on Cash Return
Be sure to get your first year of financial data set up
correctly. It should mirror your first year of operation.
For example, if the property rents are at market value when you
purchase an income property and you won't be raising the rents
during the first year, be sure to set the first year income growth
rate to Zero. If you will be making improvements to the
property during your first year of operation, be sure to appreciate
the value of the property up to what you think it will be worth when
the improvements are completed.
The Cash on Cash Return graphic can be created in a line, step or
bar format. Note: Graphs are scanned and will look a little
fuzzy.
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