Cap rate vs cash-on-cash return for rental-property investors.
Cap rate and CoC return answer different questions. Property Rollup uses both, alongside cash flow, debt pressure, rent confidence, and data quality.
Cap rate: unlevered income context
Cap rate compares net operating income to price before financing. It is useful for market comparison, but it does not tell you what a specific loan, down payment, or reserve plan does to your cash invested.
Cash-on-cash return: leveraged cash yield
CoC return compares annual pre-tax cash flow to cash invested. It can show how financing affects returns, but it can also look better than the risk deserves if reserves, repairs, insurance, or vacancy are understated.
Why Property Rollup shows both
A sortable deal table should not force one metric to carry the whole decision. CoC return, cap rate, cash flow, deal score, rent confidence, and data quality work better together.
Is cap rate or CoC return more important?
Neither is always more important. Cap rate helps compare unlevered income yield, while CoC return shows the leveraged cash yield based on actual cash invested.
Why sort by more than one metric?
Single-metric sorting can hide risk. A property with a high CoC return may still need review for weak rent support, insurance pressure, repairs, HOA rules, or data-quality issues.