The common range
Many buy-and-hold investors target a cash-on-cash return of 8–12%. Below that, the deal leans on appreciation; above it, you're getting strong current cash flow.
It depends on strategy
In high-appreciation markets, investors often accept lower cash-on-cash in exchange for expected equity growth. In cash-flow markets, they demand more. There's no universal 'good' number — only good relative to your goals and risk.
Remember it's pre-tax
Cash-on-cash return is a pre-tax metric. Depreciation can meaningfully improve your after-tax return, so a modest cash-on-cash figure may look better once the tax shelter is counted.
Frequently asked questions
Is 8% a good cash-on-cash return?
It's within the common 8–12% target range, but whether it's 'good' depends on your market and whether you're buying for cash flow or appreciation.
Is cash-on-cash return before or after tax?
It's a pre-tax metric. Depreciation can improve your actual after-tax return.
Educational information and estimates only. Not tax advice. Tax rules change and vary by situation; consult a qualified tax professional before acting.