Free calculator · instant results · no signup
Cash-on-Cash Return Calculator
Cash-on-cash return tells you what your invested dollars actually earn each year after the mortgage. Enter price, financing, rent, and expenses to get your cash flow and return.
Educational calculators — always consult a licensed professional before making financial decisions.
The all-in acquisition price.
Investment properties typically need 25%+ down.
Investment rates run above owner-occupied rates.
Gross rent across all units, before expenses.
Legal, title, inspection, lender, and transfer fees.
One-time work to make the unit rent-ready.
Tax, insurance, maintenance, management, repairs. Exclude mortgage.
Share of the year empty. ~5% is a common baseline.
30-year terms are typical in this market.
Cash-on-Cash Return
-2.0%
-$1,989/yr on $101,500 invested
Cash Invested
Pre-tax figure. Excludes income tax, appreciation, and principal paydown — cash-on-cash measures only the cash return in year one. Estimate only; consult a licensed professional.
Your Saved Scenarios
No saved scenarios yet
What cash-on-cash return really measures
Cash-on-cash return answers the most practical question a leveraged investor can ask: for every dollar of my own money in this deal, how much comes back in year one? The formula is annual pre-tax cash flow ÷ total cash invested. Cash flow is net operating income (rent after vacancy and operating expenses) minus your annual mortgage payments; cash invested is your down payment plus closing costs plus any upfront rehab.
What's a good number? Most investors treat 8–12% as a healthy cash-on-cash return for a residential rental. Below roughly 8%, a hands-on rental can struggle to justify itself against simpler passive investments once you price in the effort and risk. Above 12% is excellent — but it's worth stress-testing the rent and expense assumptions, because unusually high returns often rest on optimistic inputs or a market with hidden risk.
Why it differs from cap rate. Cap rate ignores your loan and measures the property itself; cash-on-cash includes your specific mortgage and only your invested cash. That's why a larger down payment lowers your monthly payment but can also lower your cash-on-cash return — you've tied up more cash to earn the same dollars. It's also a year-one, pre-tax snapshot: it excludes appreciation, principal paydown, and taxes, so pair it with a full multi-year cash-flow analysis for total return.
How it works
Enter price and financing
Input purchase price, down payment, interest rate, and loan term.
Add income and costs
Enter rent, operating expenses, closing costs, and any upfront rehab.
Read your return
Get annual cash flow, monthly cash flow, and cash-on-cash return.
Cash-on-cash return by scenario: $350,000 property
| Scenario | Monthly rent | Monthly cash flow | Cash-on-cash |
|---|---|---|---|
| Weak rent | $1,900 | −$260/mo | −3.0% |
| Average | $2,300 | +$140/mo | +1.6% |
| Strong | $2,700 | +$540/mo | +6.3% |
| High-demand | $3,100 | +$940/mo | +11.0% |
Assumes 25% down, 7.25% rate, 30-yr term, 5% vacancy, and operating expenses near 38% of rent. Illustrative only.
Frequently asked questions
What is a good cash-on-cash return?+
For residential rentals, most investors target a cash-on-cash return of 8–12%. Below about 8%, a rental often underperforms simpler passive investments once you account for the effort and risk. Returns above 12% are excellent but deserve a second look to confirm the rent and expense assumptions are realistic. Cash-on-cash is a year-one, pre-tax measure — pair it with total return, which also captures appreciation and principal paydown.
How is cash-on-cash return calculated?+
Cash-on-cash return = annual pre-tax cash flow ÷ total cash invested × 100. Annual pre-tax cash flow is your net operating income (rent after vacancy and operating expenses) minus annual mortgage payments. Total cash invested is your down payment plus closing costs plus any upfront rehab. It answers a simple question: for every dollar of your own cash in the deal, how many cents come back each year?
How is cash-on-cash return different from cap rate?+
Cap rate ignores financing — it divides net operating income by the full purchase price, as if you paid all cash. Cash-on-cash return includes your specific mortgage and only counts the cash you actually invested. Two buyers of the same property can have identical cap rates but very different cash-on-cash returns depending on their loan terms and down payment. Use cap rate to compare properties, and cash-on-cash to evaluate your own financed position.
Does cash-on-cash return include appreciation?+
No. Cash-on-cash return measures only the cash flow you receive in a year relative to your invested cash. It deliberately excludes appreciation, mortgage principal paydown, and tax benefits. A property with a modest cash-on-cash return can still deliver a strong total return if it appreciates well, which is why appreciation-heavy markets often show lower cash-on-cash figures.
Found a deal that cash-flows? Model the full hold.
Back to the calculator ↑Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.