Cash-on-cash return calculator
What your actual cash earns each year after the mortgage.
Designed for residential rental properties — single-family homes, condos, and small multifamily.
Cash-on-cash return
0.00%
Annual cash flow
$0.00
Cash invested
$0.00
Cash-on-cash = Annual cash flow ÷ Total cash invested
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Is this a good investment? →How it works
Cash-on-cash return shows what your own money earns each year. It includes your loan payment, so it reflects the deal you'd actually own.
Total cash invested is your down payment plus closing costs and upfront repairs.
Want the full walkthrough? Read our cash-on-cash return guide with a worked example →
Worked example: $250,000 property with 25% down at 7%
- 1.Down payment (25% of $250,000)$62,500
- 2.Closing costs + upfront repairs+ $7,500
- 3.Total cash invested$70,000
- 4.Gross annual rent ($2,000 × 12, minus 5% vacancy)$22,800
- 5.Minus operating expenses− $7,020
- 6.Minus annual mortgage payments ($187,500 loan, 7%, 30 yr)− $14,970
- 7.Annual cash flow$810
- 8.Cash-on-cash return ($810 ÷ $70,000 × 100)1.16%
1.16% is weak — at 7% interest, this deal barely pays you to own it. The levers: negotiate the price down, find a cheaper rate, or look for higher rent. Drop the price to $220,000 and the same rent pushes the return above 4%. That's why cash-on-cash is the personal number: it moves with your financing.
How to calculate cash-on-cash return
Take the property's annual pre-tax cash flow — rent after vacancy, minus operating expenses, minus twelve months of mortgage payments. Divide that by the total cash you put in: down payment, closing costs, and any upfront repairs or renovation. Multiply by 100.
Example: you put $62,500 down on a $250,000 property, plus $7,500 in closing costs — $70,000 total cash. If the property cash-flows $810 a year after the mortgage, your cash-on-cash return is 1.16%. The same property with a cheaper loan or lower price could return several times that, which is why this number moves so much with financing.
What is a good cash-on-cash return?
Most buy-and-hold investors target 8–12%. Below about 4%, you're usually better off in a broad index fund unless the property has strong appreciation or value-add potential. Above 12% is excellent — and worth double-checking, because it often means the rent estimate is optimistic or an expense is missing.
Remember that cash-on-cash is only the cash-flow part of your return. Principal paydown, appreciation, and tax benefits add to it. A 6% cash-on-cash deal where tenants also pay down $4,000 of your loan each year is meaningfully better than the headline number suggests.
Why financing changes everything
Cash-on-cash is the most loan-sensitive metric in rental property analysis. A half-point lower interest rate, a larger down payment, or a longer amortization can each swing the result by several points. That's an opportunity: if a deal's cash-on-cash is weak, the fix is often in the financing or the price, not the property itself.
It also means you can't compare your cash-on-cash to another investor's without knowing their loan terms. Cap rate is the better apples-to-apples comparison; cash-on-cash is the personal one.
Cash-on-cash vs ROI: what's the difference?
Cash-on-cash measures one year's cash flow against your invested cash. Total ROI folds in appreciation, loan paydown, and eventual sale proceeds over the whole holding period. Cash-on-cash is the honest year-one number — it tells you whether the property pays you to own it from day one.
For a complete picture, run the full rental property analysis: cash-on-cash for your yearly yield, cash flow for the monthly reality, and the 5-year projection for the long game.
Frequently asked questions
What is a good cash-on-cash return?
Many investors target 8–12%. Anything above what you'd earn in an index fund, with less risk, is worth a close look.
Cash-on-cash vs cap rate?
Cap rate ignores the loan; cash-on-cash includes it. Use cap rate to compare properties and cash-on-cash to judge your deal.
Does cash-on-cash include appreciation?
No. It only counts cash flow. Principal paydown and appreciation are separate returns on top of it.
Why is my cash-on-cash return negative?
The mortgage and expenses exceed the rent after vacancy. Either the price is too high for the rent, the loan terms are expensive, or an expense is unusually heavy. Stress-test the deal before walking away — sometimes a lower offer fixes it.