Cash-on-Cash Return Calculator

Enter your property's annual pre-tax cash flow and the total cash you invested (down payment, closing costs, and initial repairs) to calculate your cash-on-cash return — the actual yield on the money you put in.

Cash Flow
$
Gross rent minus all operating expenses and mortgage payments. Can be negative.
Cash Invested
$
Down payment + closing costs + initial repairs/rehab. Does not include the loan amount.
Property Details (optional)
$
Optional — shown in the results summary for reference only.
Cash-on-Cash Analysis
Annual pre-tax cash flow $0.00
Total cash invested $0.00
Purchase price —
Cash-on-cash return 0.00%
CoC Return
0.00%
Cash Flow
$0
Cash In
$0
Cash-on-cash return measures current cash yield only. It does not include appreciation, equity paydown, tax benefits, or depreciation. Compare against your target return and alternative investments.

About the Cash-on-Cash Return Calculator

Cash-on-cash return is the most practical metric for real estate investors who use financing. While cap rate tells you how productive a property is in a vacuum, cash-on-cash return tells you how well your actual dollars are working for you — accounting for your specific mortgage terms, down payment, and out-of-pocket costs. Two investors buying the same property at the same price can have very different cash-on-cash returns depending on how each financed the purchase.

Cash-on-Cash Return Formula

Annual Pre-Tax Cash Flow  = Gross Rent − Operating Expenses − Mortgage Payments
Total Cash Invested       = Down Payment + Closing Costs + Initial Rehab
CoC Return                = (Annual Pre-Tax Cash Flow ÷ Total Cash Invested) × 100

What Goes Into Cash Flow

Pre-tax cash flow starts with gross rental income and subtracts every cash expense:

  • Operating expenses: property taxes, insurance, property management (typically 8–12% of gross rent), maintenance, repairs, vacancy allowance, HOA fees, utilities (if owner-paid)
  • Debt service: monthly mortgage payment (principal + interest × 12)
  • Not included: depreciation (non-cash), income taxes, capital improvements

What Counts as Cash Invested

Total cash invested is every dollar you spent out of pocket to acquire and prepare the property:

  • Down payment
  • Closing costs (origination fees, title, escrow, prepaid items)
  • Initial repairs, rehab, or renovation costs
  • Initial reserves funded at closing (some investors include this)

The loan amount is not included — that's borrowed capital, not your personal investment.

CoC Return vs. Cap Rate

Cap rate ignores how you financed the property. It measures the property's unlevered yield. Cash-on-cash return reflects your levered yield — the return on your equity. When you use leverage (a mortgage), CoC return can be higher or lower than cap rate depending on whether your borrowing rate is below or above the cap rate. If your mortgage rate exceeds the cap rate, leverage is working against you.

Benchmarks

  • 4–6% — Conservative; common in appreciating urban markets
  • 7–10% — Solid; typically the target for many buy-and-hold investors
  • 10–15%+ — Aggressive; possible in secondary markets, value-add deals, or with significant leverage

Cash-on-cash return is a snapshot metric based on current-year cash flow and does not account for appreciation, tax advantages, or future performance changes. Not financial or investment advice.

Frequently Asked Questions

What is cash-on-cash return?

Cash-on-cash return (CoC) measures the annual pre-tax cash flow generated by a property as a percentage of the total cash you invested. Unlike cap rate, it accounts for financing — so your mortgage payment is included in the cash flow calculation. Formula: CoC Return = Annual Pre-Tax Cash Flow ÷ Total Cash Invested × 100. It answers the question: for every dollar I put in, how many cents did I get back in a year?

What is a good cash-on-cash return?

What counts as 'good' depends on investor goals, risk tolerance, and market conditions. Many investors target 8–12% CoC as a baseline for residential rental properties. In hot markets with strong appreciation potential, investors may accept 4–6% CoC. In higher-risk or secondary markets, 12–15%+ may be expected to compensate. Always compare CoC to alternative investments — a 6% CoC might be acceptable if you also expect meaningful appreciation.

What is included in annual pre-tax cash flow?

Annual pre-tax cash flow = Gross rental income − Operating expenses − Annual mortgage payments (principal + interest). Operating expenses include property management, maintenance, insurance, property taxes, and utilities. Pre-tax means before income tax — CoC does not account for depreciation deductions or the tax treatment of rental income. It's a cash-in vs. cash-out metric.

What counts as total cash invested?

Total cash invested is the sum of all out-of-pocket costs to acquire and prepare the property: down payment + closing costs + initial rehab or repair costs + any reserves funded at closing. It does not include the loan amount, since that's borrowed money you did not personally invest. This is your equity at risk — the denominator of the CoC formula.

How is cash-on-cash return different from cap rate?

Cap rate is financing-neutral: it divides NOI by property value and ignores your mortgage entirely. Cash-on-cash return is financing-specific: it divides after-debt cash flow by your actual cash investment. Use cap rate to compare properties on an apples-to-apples basis. Use cash-on-cash return to evaluate your actual return given your specific financing structure. The same property can look very different on each metric depending on leverage.

Does cash-on-cash return include appreciation?

No. Cash-on-cash return is a current-yield metric — it only measures cash income generated this year relative to cash invested. It does not include unrealized appreciation, equity paydown from the mortgage, or future resale gain. For a total-return view, investors also calculate equity multiple or internal rate of return (IRR), which incorporate all cash flows including the eventual sale.