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Cash-on-Cash Return Calculator India
With metro rental yields of 2–4% and higher home-loan rates, financed Indian rentals often run negative cash flow. See the exact number on your invested capital.
Educational calculators — always consult a licensed professional before making financial decisions.
The all-in acquisition price.
Investment properties typically need 20%+ 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. ~4% is a common baseline.
20-year terms are typical in this market.
Cash-on-Cash Return
-19.6%
-₹4,50,690/yr on ₹23,00,000 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.
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Cash-on-cash return for Indian rentals
Cash-on-cash return is your annual pre-tax cash flow divided by the cash you invest — down payment, registration and stamp duty, and any upfront work. In India this figure is often negative in the early years of a financed purchase: gross rental yields in metros run just 2–4% (Mumbai around 2–3%, Bengaluru roughly 3–3.6% citywide), while home-loan rates are meaningfully higher, so the EMI typically exceeds the rent.
That doesn't make the property a poor investment — it reframes where the return comes from: capital appreciation, disciplined loan paydown, and the tax benefits on home-loan interest under Section 24(b), together with the flat 30% standard deduction on net annual value under Section 24(a). Use this calculator to see the cash reality, and the rental yield calculator for the gross-versus-net yield view.
How it works
Enter value and loan
Input property value, down payment, home-loan rate, and tenure.
Add income and costs
Enter rent, operating expenses, registration/stamp duty, and rehab.
Read your return
Get monthly cash flow and cash-on-cash return on invested capital.
Metro rental yields vs home-loan rates (why cash flow is often negative)
| City | Gross rental yield | Typical home-loan rate |
|---|---|---|
| Mumbai | 2.0–3.0% | ~8.5–9.0% |
| Delhi / NCR | 2.5–3.5% | ~8.5–9.0% |
| Bengaluru | 3.0–3.6% | ~8.5–9.0% |
| Pune / Hyderabad | 3.0–3.5% | ~8.5–9.0% |
When the loan rate exceeds the rental yield, financed rentals run negative cash flow — the case rests on appreciation and Section 24 tax benefits.
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.
Is cash-on-cash return useful for property in India?+
Yes, especially if you finance the purchase with a home loan. Because rental yields in Indian metros are low (2–4%) while home-loan rates are higher, financed rentals often show negative early cash-on-cash returns, with the investment case resting on capital appreciation and the Section 24 tax benefits on home-loan interest. Running the number makes that trade-off explicit.
Run your next deal through the numbers.
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.