What is Cash on Cash Return Calculator?
The Cash on Cash Return Calculator measures the annual return relative to the cash invested.
When to Use This Calculator
- Comparing two rental properties with different down payments to see which actually returns more on the cash you put in
- Deciding between paying all-cash for a property and financing it with a mortgage
- Evaluating a BRRRR or house-hacking deal where leverage changes how much cash you have invested
- Setting a minimum acceptable cash-on-cash threshold before you make an offer on a property
- Checking a rental's actual first-year performance against the pro forma you underwrote it with
- Explaining a deal's return to a lender or investing partner in a single, comparable number
Steps:
- Enter annual cash flow.
- Input total cash invested.
- View cash-on-cash return.
Formula
Cash-on-Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
Total Cash Invested = Down Payment + Closing Costs + Rehab Costs
Example: $5,000 Cash Flow / $60,000 Invested = 8.33%
Target range: 8–12% is typical for most markets.
Use Cases
- Investment comparison
- Portfolio analysis
- Return tracking
Key Benefits
- Get accurate cash on cash return calculator results instantly
- Save time with cash on cash return calculator calculations
- Make informed decisions with clear data
- Free on any device no downloads
Pro Tips
- Double-check inputs for accuracy
- Run multiple scenarios
- Combine with other tools
Common Mistakes to Avoid
- Using inaccurate inputs
- Ignoring key factors
- Misinterpreting outputs
Key Terms Explained
- Input: Values you provide
- Output: Results computed
- Formula: Method used
- Result: Calculated answer
Related Concepts
- Cap Rate: Cap rate measures a property's return based on its full purchase price, independent of financing, which makes it the right metric for comparing deals across different loan structures. Use our cap rate calculator alongside this one — a property with a great cash-on-cash return but a weak cap rate may only look good because of aggressive leverage.
- Debt Service Coverage Ratio (DSCR): DSCR measures whether a property's income safely covers its mortgage payment, which lenders require before approving financing. A strong cash-on-cash return means little if the deal can't clear the lender's minimum DSCR — check both with our DSCR calculator.
- Leverage and Return: Financing a smaller percentage of the purchase price increases cash-on-cash return (less cash invested for similar cash flow) but also increases risk if rents drop or rates rise. Our rental property calculator lets you test different down-payment scenarios side by side.
- The BRRRR Strategy: Buy, Rehab, Rent, Refinance, Repeat investors often pull most or all of their original cash back out via a refinance, which can push cash-on-cash return extremely high (or undefined) since almost no cash remains invested. Our BRRRR calculator models this full cycle.
- Rent vs Buy Trade-offs: Cash-on-cash return only applies to investment purchases — if you're deciding whether to buy a home to live in versus renting, that's a different comparison entirely. Our rent vs buy calculator handles the owner-occupied version of this decision.
Example
With $5K annual cash flow and $60K invested, cash-on-cash return is 8.33%.
Interpreting Your Results
Cash-on-cash return only measures the return on the cash you actually invested — down payment, closing costs, and any immediate repairs — not the property's total value or the equity you build through appreciation and loan paydown. A 12% cash-on-cash return means every $10,000 you put in cash returns roughly $1,200 a year in cash flow, before appreciation or principal paydown is counted at all. Most investors treat 8-12% as a solid range for a leveraged rental in a stable market; below 5% usually means the deal is too thin to absorb a vacancy or a rate increase, and a number above 15% often signals either an unusually cheap purchase or expenses that were underestimated in the model. Always cross-check cash-on-cash against cap rate and DSCR before committing capital — a strong cash-on-cash number built on optimistic rent assumptions is not, on its own, a strong deal.