The Strengths of Cash on Cash Return: Why is it Used?

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There are many reasons why people choose Cash On Cash Return (CoC) calculation than any other calculations available to compute opportunities and income from a rental property. Just to make you understand as well, here are the strengths of CoC return calculation.

The Strengths Of Coc Return

To enumerate few of the strengths of CoC, read through below:

  • Simplicity

There is nothing simpler and clear-cut than using this calculation to arrive to the income a landlord gets from his rental property. There are other metrics that bring confusion to landlords, hence using this calculation can make them calculate without any issues at all.
All they need to do is input certain values and get results as a definite percentage they can get from their investment.

  • Quick Comparison Of Investments

Yes, this can also be used to compare your investments fast. Although, this is possible if the investor has the possible yield of his/her investment, and the amount he/she plans to invest. This calculation can let you see your investment’s highest return probable, in a fast manner. Compared to other available tools, this is indeed hard to beat.

This can let you determine your returns after changing different factors
This is a good tool to use when you are trying to weigh which amongst the strategies is best to follow to ensure higher income potential. This you can do by changing different factors, like down payments, paying in full etc, and see the result afterwards.
The result it provides can be used as a leverage on which among the payment option is best to use.
Business Graph with arrow and coins showing profits and gains

  • Motivation And Encouragement

CoC gives an excellent amount of motivation and encouragement. It would really be nice to see how stock portfolio plays up and then down, but for sure, there is nothing more satisfactory and exciting than receiving a deposit or check every 1st of the month from your passive income schemes. Although, it is not that fast to get there, yet being able to receive a check would make you the happiest person on earth even how minimal it is.
Any unexpected money kicking in your bank account is something that you must cherish and keeps you motivated to make more and do more!

  • You Can See Your Future

You Can See Your Future
CoC is not your ordinary fortune teller, as it provides you with results based on actual figures and numbers, if you have passive income on different investments, you can assess whether you are ready to retire or not yet.

If your CoC shows that your passive income is more than enough to cover your expenses today and in the future, then you can go ahead and do so. The figures you can see here can let you see your future and your readiness to retire.

Given all the benefits of using CoC, there is no reason why would you not choose to calculate your income. It is straight forward, and does not need expertise to use.