Cash-on-Cash Return Calculator
Cash-on-cash return measures the annual return on the actual cash you invest in a property. Unlike cap rate, it factors in your financing — showing how leverage amplifies (or diminishes) your returns.
Results
Cash-on-Cash Return
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Monthly Cash Flow
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Annual Cash Flow
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CoC Return = Annual Cash Flow / Total Cash Invested × 100
How Cash-on-Cash Return Works
Cash-on-cash return answers one question: “What percentage return am I earning on the cash I actually put into this deal?”
It's calculated by dividing your annual pre-tax cash flow by the total cash you invested (down payment + closing costs + rehab).
This metric is especially useful when comparing deals with different financing structures. A property bought with 20% down will have a very different cash-on-cash return than the same property bought with 25% down, even though the cap rate stays the same.
What Is a Good Cash-on-Cash Return?
Most investors target 8-12% cash-on-cash return as a baseline, but the right target depends on your market and strategy:
- 6-8%: Acceptable in appreciation markets where you expect equity growth over time.
- 8-12%: The sweet spot for most cash-flow investors. Strong returns without excessive risk.
- 12%+: Excellent, but verify your assumptions. High returns often indicate higher risk or optimistic projections.
The Impact of Leverage
Leverage is the reason cash-on-cash return exists as a separate metric from cap rate. By using a mortgage, you can amplify your returns — but leverage works both ways:
- Positive leverage: When the property's cap rate exceeds the cost of debt, borrowing increases your cash-on-cash return above the cap rate.
- Negative leverage: When interest rates are high relative to the cap rate, borrowing actually reduces your return below what an all-cash purchase would yield.
Try adjusting the down payment and interest rate sliders to see how leverage affects your return in real time.