Real Estate Math

An Oklahoma investor pays $225,000 for a rental property that generates $1,900/month net income. What is the annual cash-on-cash return?

A8.8%
B9.6%
C10.1%✓ Correct
D12.0%

Explanation

Annual net income = $1,900 x 12 = $22,800. Cash-on-cash return = $22,800 / $225,000 = 0.1013 = 10.1%.

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