Cash-on-Cash Return Calculator
Cash-on-cash return is the metric that tells you how hard your actual out-of-pocket dollars are working, and it is the number seasoned investors care about most on a leveraged deal. Unlike cap rate, which ignores your mortgage, cash-on-cash divides the annual pre-tax cash flow left after debt service by the total cash you personally injected — down payment, closing costs, and rehab. The result is the real, spendable yield on your money in year one. Because it accounts for the power of leverage, a modest property can post a strong cash-on-cash return when financed intelligently, while an all-cash purchase may look safer but return far less on capital deployed. Use this calculator to size up rentals, compare financing structures, and confirm a deal clears your personal return threshold before you wire the funds.
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Results update live as you type. Estimates only — not financial, tax, or investment advice.
The Formula
Cash-on-Cash Return = (Annual Pre-Tax Cash Flow ÷ Total Cash Invested) × 100
Understanding the Cash-on-Cash Return Calculator
Cash-on-cash return answers the question that actually matters when you use a mortgage: what percentage of the money I personally put in comes back to me in cash each year? Because it divides your annual pre-tax cash flow by your total out-of-pocket investment — down payment, closing costs, and rehab — it captures the amplifying effect of leverage that cap rate deliberately ignores. Two investors can buy the identical property and post very different cash-on-cash returns based purely on how they financed it.
Treat cash-on-cash as a year-one snapshot, not a complete performance measure. It does not account for loan paydown, appreciation, or the tax benefits of depreciation — all of which add to your true return over time. It also shifts every year as rents rise and expenses change. Use it to quickly compare deals and financing structures side by side, then layer in IRR for the full multi-year picture.
Frequently Asked Questions
What is a good cash-on-cash return on a rental property?
Most buy-and-hold investors target a cash-on-cash return of 8–12%, though acceptable ranges vary by market and strategy. In expensive appreciation markets, investors may accept 4–6% because most of the return comes from equity growth; in cash-flow markets, 10% or more is common and expected.
What's the difference between cash-on-cash return and ROI?
Cash-on-cash measures only annual cash flow relative to cash invested. Total ROI is broader — it also includes loan principal paydown, appreciation, and tax benefits. Cash-on-cash is a clean year-one liquidity metric; ROI and IRR capture the full lifetime return of the investment.
Does cash-on-cash return include appreciation?
No. Cash-on-cash counts only realized, spendable cash flow — it excludes appreciation, mortgage paydown, and tax savings because none of those put cash in your pocket in the current year. That is why a property with a modest cash-on-cash return can still be an excellent long-term investment.