Cash-on-Cash Return Calculator

The Cash-on-Cash Return Calculator measures the annual return on the actual cash you put into a rental property. It divides your annual pre-tax cash flow by the total cash you invested — your down payment, closing costs, and rehab — so you see the real yield on the money that left your pocket, not on the full purchase price. Along with the headline percentage, the tool shows a cash-flow waterfall, a breakdown of your invested cash, and supporting metrics like cap rate, NOI, and DSCR.

What is Cash-on-Cash Return?

Cash-on-cash return (CoC) is one of the most popular metrics in rental real estate because it answers a simple question: "For every dollar of my own cash I put in, how many cents come back to me in cash each year?" Because most rentals are bought with a mortgage, the cash you actually invest is far smaller than the purchase price — so cash-on-cash return often looks very different from a simple price-based yield. It is a pre-tax, single-year measure of cash flow only.

Cash-on-Cash Return Formula

The two ingredients each break down further:

where NOI (Net Operating Income) is the effective rental income (after vacancy) minus all operating expenses such as property tax, insurance, maintenance, management, and HOA fees — but not the mortgage.

A Worked Example

Suppose you buy a $180,000 rental with 20% down ($36,000), $4,000 in closing costs, and $6,000 in rehab — a total of $46,000 invested. It rents for $1,850/month ($22,200/year). After a 5% vacancy allowance, $3,300 in taxes and insurance, $2,160 in other expenses, and a $910/month mortgage ($10,922/year), the property earns a net operating income of about $15,630 and nets roughly $4,700 in annual cash flow. That gives a cash-on-cash return of about $4,700 ÷ $46,000 ≈ 10.2%. The same property bought with all cash would have a higher cash flow but a much larger cash investment — and usually a lower cash-on-cash return, which is the leverage effect at work.

What is a Good Cash-on-Cash Return?

These ranges are guidelines, not rules. Investors in expensive, high-appreciation markets often accept lower cash-on-cash returns because they expect equity growth, while cash-flow-focused investors in cheaper markets push for higher numbers.

Cash-on-Cash Return vs Cap Rate vs ROI

These three metrics are easy to confuse:

• Cap rate = NOI ÷ purchase price. It ignores financing entirely, so it describes the property regardless of who buys it or how.
• Cash-on-cash return = after-mortgage cash flow ÷ cash invested. It reflects your financing and down payment, so two buyers can get very different CoC returns on the same property.
• Total ROI goes further still, adding appreciation, loan principal paydown, and tax benefits to cash flow. Cash-on-cash return deliberately leaves those out to stay a clean, current-year cash measure.

How Leverage Changes Cash-on-Cash Return

Using a mortgage (leverage) shrinks the cash you invest, which can boost cash-on-cash return — but only while the property earns more than the loan costs. If the interest rate is high relative to the property's cap rate, leverage works against you and can push cash flow, and the cash-on-cash return, negative. This is why the same property can be a great deal for one buyer and a poor one for another, depending on the loan terms.

What Affects Your Cash-on-Cash Return?

How to Use This Calculator

1. Enter the purchase and financing details: purchase price, down payment percentage, interest rate, and loan term. For an all-cash deal, set the down payment to 100%.
2. Add your upfront cash costs: closing costs and any rehab or repairs. These join the down payment to form your total cash invested.
3. Enter income and expenses: monthly rent, vacancy rate, annual property tax and insurance, and other monthly expenses.
4. Click Calculate: review your cash-on-cash return on the rating gauge, the cash-flow waterfall, your invested-cash donut, and supporting metrics like cap rate and DSCR.

Frequently Asked Questions

What is cash-on-cash return?

Cash-on-cash return is the ratio of a property's annual pre-tax cash flow to the total cash you actually invested in it. It measures the yearly return on the money that left your pocket — including the down payment, closing costs, and rehab — rather than on the full purchase price.

How do you calculate cash-on-cash return?

Cash-on-Cash Return = Annual Pre-Tax Cash Flow ÷ Total Cash Invested × 100. Annual pre-tax cash flow is the net operating income minus the annual mortgage payments. Total cash invested is the down payment plus closing costs plus rehab costs.

What is a good cash-on-cash return?

Many rental investors target a cash-on-cash return of 8% to 12%. Below about 4% is considered weak because it leaves little margin for surprises, while a negative return means the property loses money each month. What counts as good also depends on your market, risk tolerance, and how much you value appreciation over cash flow.

What is the difference between cash-on-cash return and cap rate?

Cap rate divides net operating income by the property price and ignores financing, so it describes the property itself. Cash-on-cash return divides the after-mortgage cash flow by the cash you invested, so it reflects your specific financing and down payment. With leverage, the two numbers can differ widely.

Does cash-on-cash return include the mortgage?

Yes. Cash-on-cash return is based on cash flow after the mortgage payment, so it accounts for your loan. This is what makes it different from cap rate, which is calculated before any debt service.

Does cash-on-cash return include appreciation or tax benefits?

No. Cash-on-cash return is a pre-tax measure based only on actual cash flow in a single year. It excludes property appreciation, loan principal paydown (equity build), and tax benefits such as depreciation. Those add to your true total return but are not part of the cash-on-cash figure.

Additional Resources

• Cash on Cash Return - Wikipedia
• Capitalization Rate - Wikipedia