Real Estate Math

An investor paid $75,000 for a rental property, collects $1,000/month in rent, and has annual expenses of $4,800. What is the annual cash-on-cash return?

A8%
B9.6%✓ Correct
C12%
D14.4%

Explanation

Annual rent = $1,000 × 12 = $12,000. Annual cash flow = $12,000 − $4,800 = $7,200.

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