Calculate the cash-on-cash return on a rental property.
Calculated instantly in your browser.
How do you calculate cash-on-cash return?
Annual cash flow = rental income − operating expenses − debt service. Cash-on-cash return = annual cash flow ÷ total cash invested × 100. It factors in financing, measuring the return on cash actually spent. For example, $24,000 income less $6,000 expenses and $12,000 debt is $6,000 cash flow; on $50,000 invested that is a 12% return.
Understanding your result
Cash-on-cash differs from cap rate because it factors in financing — it measures the return on the cash you actually spent, not the full property value. It ignores appreciation, principal paydown and tax effects.
Formula and method
Annual cash flow = rental income − operating expenses − debt service. Cash-on-cash return = annual cash flow ÷ total cash invested × 100.
Assumptions and limitations
This measures pre-tax cash flow against the cash you invested, using the income, expenses and debt figures you enter for one year. It ignores appreciation, principal paydown, tax effects, vacancy swings and future rate or cost changes. It is one metric among several. Treat the return as an estimate, not investment advice.
Worked example
$24,000 income less $6,000 expenses and $12,000 debt is $6,000 cash flow; on $50,000 invested that is a 12% return.
How to use this tool
- Enter the annual rental income.
- Enter operating expenses and debt service.
- Enter your total cash invested.
Common mistakes to avoid
- Leaving debt service out of the cash flow.
- Forgetting closing costs and rehab in the cash invested.
About the Cash-on-Cash Return Calculator
The Cash-on-Cash Return Calculator measures a rental property’s annual pre-tax cash flow against the actual cash you put in — a key metric for leveraged real-estate investing.
Who should use this tool
Real-estate investors evaluating rental deals.
Benefits
- Annual and monthly cash flow.
- Cash-on-cash return percentage.
- Accounts for debt service.
- Clear worked steps.
Practical use cases
- Comparing rental deals.
- Checking a property’s cash yield.
- Modelling the effect of a bigger down payment.
Frequently asked questions
How is cash-on-cash different from cap rate?
Cap rate ignores financing and uses the property value; cash-on-cash includes the mortgage and uses only the cash you invested.
What is a good cash-on-cash return?
It varies by market and risk, but many investors look for 8–12% or more. Always compare against alternatives and your own goals.
Why can cash-on-cash return change over time?
It reflects one year of cash flow, but rents, operating costs, vacancy and financing all shift. A rate reset, a rent rise or a major repair can move the figure sharply. Because it also ignores appreciation and principal paydown, review it alongside cap rate and total return over your holding period.