Cash on Cash Return Calculation
Hi fellow REI's, I don't know why it seems difficult to find clarity on this question. But when calculating CoC return, would I include the taxes paid as part of my cash to close? If so, doesn't that skew the CoC calculation depending on the time of year I buy the property since buying it at certain parts of the year creates a larger payment to escrow the taxes? Thanks in advance for setting me straight here.
Most Popular Reply
@Jason Small you are going to pay annual taxes at some point, so it doesn't make a difference. You are taking your cash flow and dividing it by all of the expenses for year one. The things I see people miss more often are things like repairs, lawn care, snow removal, etc. These are real costs that a lot of newer investors don't think about! I know I didn't until I shoveled snow a few times at my rental property...