Cash Flow and Equity Yield Analysis

Property return measures covering annual equity cash flow, compound equity yield, after-tax outcomes, and capital recovery.

Cash flow and equity yield analysis follows money after property operations and financing. Cash-on-Cash Return measures one year’s pre-tax equity cash flow relative to cash invested. Equity Yield Rate incorporates the complete equity cash-flow series and net sale proceeds.

After-Tax Cash Flow and After-Tax Equity Yield add stated tax assumptions. Those results are investor- and jurisdiction-specific and should not be compared with pre-tax measures without reconciliation.

Financial Management Rate of Return (FMRR) adds explicit assumptions about funding future deficits and reinvesting interim receipts. It is a specialized supplement to IRR and net present value, not a replacement for reviewing the underlying cash flows.

Recapture Rate has a narrower appraisal meaning. It represents recovery of capital invested in wasting improvements under specified capitalization methods; it is not an equity yield, accounting depreciation expense, or tax depreciation-recapture rate.

Follow the Cash-Flow Sequence

StageMain calculationWhat it shows
Property operationsRent less vacancy and operating expensesNet operating income before financing
Annual equity cash flowNOI less debt service and stated equity-level cash itemsCash available to or required from equity
Cash-on-cash returnAnnual pre-tax equity cash flow divided by cash investedOne-period cash yield
Net equity reversionSale price less selling costs and loan payoffEquity proceeds at exit
Equity yield rateIRR of all equity contributions and receiptsCompound holding-period return

What to Verify

  • Whether cash flow is before or after debt service, capital expenditures, reserves, and taxes.
  • Whether invested cash includes closing costs, initial improvements, reserves, and later capital calls.
  • Loan amount, interest rate, amortization, maturity, and balance at sale.
  • Rent, vacancy, expense, capital-spending, refinancing, and sale assumptions by period.
  • Whether a return is one-period or multi-period, projected or realized, and before-tax or after-tax.

These measures are educational analytical tools, not guaranteed returns or individualized investment, appraisal, tax, accounting, legal, or lending advice.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.

After-Tax Cash Flow

After-tax cash flow measures property cash after debt service, capital items, and investor-specific taxes under a stated timing convention.

After-Tax Equity Yield

After-tax equity yield is the annualized return implied by an investor's equity contributions and after-tax property cash receipts over a holding period.

Cash-on-Cash Return

Cash-on-cash return compares annual pre-tax cash flow after debt service with the cash equity invested in a property.

Recapture Rate

Recapture rate is an appraisal allowance for recovering capital invested in wasting improvements over their remaining economic life.

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