Real Estate Math
An investor buys a rental property for $180,000 all-cash. Annual NOI is $14,400. What is the cash-on-cash return?
A6%
B8%✓ Correct
C10%
D12%
Explanation
Cash-on-cash return = NOI ÷ Cash invested = $14,400 ÷ $180,000 = 0.08 = 8%.
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