Cash-on-Cash Return Calculator
Calculate your annual return on total cash invested in rental property.
Investment Details
Annual Cash Flow
Total Cash Invested
$0
Cash-on-Cash Return
0.00%
Breakdown
How to Use This Cash-on-Cash Return Calculator
Our free cash-on-cash return calculator measures your annual pre-tax cash flow as a percentage of the cash you actually invested in the property.
Cash-on-cash return = (Annual Cash Flow / Total Cash Invested) x 100. This metric shows how well your invested money is performing, accounting for financing.
Unlike cap rate, cash-on-cash considers your actual mortgage payment, making it a more practical metric for evaluating your real-world investment performance.
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Frequently Asked Questions about Cash-on-Cash Return
What is a good cash-on-cash return?
8-12% is considered strong. Below 6% may not justify the risk and effort of real estate investing compared to passive investments.
How do I calculate cash-on-cash return?
Cash-on-cash = (Annual Pre-Tax Cash Flow / Total Cash Invested) x 100. Total cash invested includes down payment, closing costs, and renovations.
What is the difference between cash-on-cash and ROI?
Cash-on-cash focuses on cash flow relative to cash invested. ROI includes all returns (appreciation, equity buildup, tax benefits). Cash-on-cash is more practical for cash flow analysis.
How does financing affect cash-on-cash return?
Leverage amplifies returns. With a mortgage, your cash invested is smaller, so the same cash flow produces a higher percentage return. But financing also increases risk.
How do I improve my cash-on-cash return?
Increase rent, reduce expenses, negotiate lower rates, improve management efficiency, or refinance to reduce mortgage costs.
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