Real Estate Math
An investment property has a cash flow of $36,000/year. The investor paid $480,000 cash for the property. What is the annual cash-on-cash return?
A7.5%✓ Correct
B8%
C13.3%
D6%
Explanation
Cash-on-cash return = Annual cash flow ÷ Cash invested = $36,000 ÷ $480,000 = 7.5%.
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