Cash on Cash Return is a common metric used in real estate investing that measures the return to an investor from an income producing property. This metric is used to measure the investor’s initial investment in the property versus the annual pre-tax cash flow generated from the investment over a given period of time. Cash on Cash Return is often the key metric used by investors when comparing investment opportunities, allowing them to make an informed decision based on their own individual financial goals and specific financial situation.
The Debt-to-Income (DTI) ratio is a measure used by financial institutions to evaluate the creditworthiness of a person. It measures the overall debt-to-income ratio of an individual as a proportion of their gross income. This measure is important for lenders to assess the repayment capability of an individual. In the Forex market, traders may use the DTI ratio as part of their analysis when deciding to open a position, or to close a current one. In addition, it can provide an indicator of the overall financial health of a trader, which can be used for making decisions about risk and account size.