Cash-on-Cash Return Calculator
Calculate the annual return on actual cash invested in a rental property, factoring in down payment, closing costs, rehab, income, and expenses.
About this calculator
Cash-on-Cash Return measures how hard the actual cash an investor puts into a rental property works, as distinct from metrics like cap rate that ignore financing entirely. Total Cash Invested sums Down Payment (Purchase Price times Down Payment %), Closing Costs, and any Rehab Costs — the real out-of-pocket cash required to close, not the full purchase price, since most of the purchase price is financed through the mortgage. Annual Cash Flow works from Effective Gross Income (Monthly Rent times 12, reduced by Vacancy Rate to reflect realistic occupancy) minus Annual Operating Expenses (taxes, insurance, maintenance, and property management, but not mortgage principal and interest) to get Annual NOI, then subtracts Annual Mortgage Payments to arrive at the cash actually left over.
Cash-on-Cash Return divides that Annual Cash Flow by Total Cash Invested and expresses it as a percentage — a property that returns $5,000 a year in cash flow on $50,000 of invested cash returns 10% cash-on-cash, a figure directly comparable to other investments' returns in a way raw dollar cash flow is not. Because financing terms (down payment percentage, mortgage rate implied by the monthly payment) directly shrink or grow the cash-invested denominator without necessarily changing the cash-flow numerator by the same proportion, two investors buying the identical property with different financing structures can see meaningfully different cash-on-cash returns from the same asset.
Financial Disclaimer
This calculator is for educational purposes only and does not constitute financial advice. Results are estimates based on the inputs provided. Consult a qualified financial advisor before making investment or financial planning decisions.
Inputs
Results
Cash-on-Cash Return
6.56%
How to Use This Calculator
- Enter Purchase Price and Down Payment % to calculate total initial cash invested.
- Add Closing Costs % and any Rehab Costs to get a full picture of your out-of-pocket investment.
- Enter Monthly Rent and Vacancy Rate % for effective gross income.
- Input Monthly Mortgage, Property Taxes, Insurance, Maintenance, and Management fees.
- Read Cash-on-Cash Return — the annual net cash flow divided by total cash invested — as your primary performance metric.
How the result changes with Monthly Rent ($)
| Monthly Rent ($) | Cash-on-Cash Return |
|---|---|
| 900 | -11.19% |
| 1,350 | -2.31% |
| 2,700 | 24.3% |
| 4,500 | 59.79% |
What each input means
- Purchase Price ($)
- Total property purchase price.
- Down Payment (%)
- Percentage of purchase price paid in cash.
- Closing Costs (%)
- Closing costs as % of purchase price.
- Rehab / Repair Costs ($)
- Initial renovation or repair costs paid out of pocket.
- Monthly Rent ($)
- Gross monthly rental income.
- Vacancy Rate (%)
- Expected percentage of time the property is vacant.
- Monthly Mortgage P&I ($)
- Monthly principal and interest payment.
- Monthly Property Taxes ($)
- Monthly property tax amount.
- Monthly Insurance ($)
- Monthly insurance premium.
- Monthly Maintenance ($)
- Monthly maintenance and repair reserves.
- Monthly Property Mgmt ($)
- Monthly property management fees (0 if self-managed).
What each result means
- Cash-on-Cash Return
- Annual cash flow divided by total cash invested.
- Total Cash Invested
- Down payment + closing costs + rehab.
- Annual Cash Flow
- Net income after all expenses and mortgage.
- Monthly Cash Flow
- Net monthly income after all expenses.
- Effective Gross Income
- Annual rent minus vacancy losses.
- Annual NOI
- Net operating income before debt service.
- Annual Operating Expenses
- Taxes, insurance, maintenance, and management.
- Annual Mortgage Payments
- Total annual principal and interest.
How this is calculated
Worked example, using the default values
- Identify Input Parameters11 parametersPurchase Price ($) = 200000, Down Payment (%) = 25, Closing Costs (%) = 3, Rehab / Repair Costs ($) = 0, Monthly Rent ($) = 1800, Vacancy Rate (%) = 8, Monthly Mortgage P&I ($) = 900, Monthly Property Taxes ($) = 200, Monthly Insurance ($) = 100, Monthly Maintenance ($) = 150, Monthly Property Mgmt ($) = 0 = 11 input(s) provided
- Calculate Cash-on-Cash ReturnCash-on-Cash Return = totalCashInvested > 06.56 = 6.56%
- Calculate Total Cash InvestedTotal Cash Invested = downPayment + closingCosts + rehabCosts56000 = $56,000
- Calculate Annual Cash FlowAnnual Cash Flow = annualNOI - annualMortgage3672 = $3,672
Engine last updated . Checked against 2 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
What counts as Total Cash Invested?
Total Cash Invested sums the Down Payment (Purchase Price times Down Payment %), Closing Costs (as a percentage of purchase price), and any Rehab/Repair Costs paid out of pocket before renting the property. It excludes the financed portion of the purchase price — the mortgage — since that capital comes from the lender, not the investor, and cash-on-cash return is specifically about the return on the investor's own cash.
Why does raising Down Payment % lower my Cash-on-Cash Return, even though it doesn't change my rent or expenses?
Cash-on-Cash Return is Annual Cash Flow divided by Total Cash Invested, and Down Payment % directly drives Total Cash Invested without affecting Annual Cash Flow's numerator components (rent, vacancy, operating expenses) at all — though a larger down payment does lower Monthly Mortgage if you adjust it accordingly. Holding the mortgage payment fixed, a larger down payment simply puts more of your own cash into the same deal, which — for the same dollar return — always produces a lower percentage return.
What's the difference between Annual NOI and Annual Cash Flow?
Annual NOI (net operating income) is Effective Gross Income minus Annual Operating Expenses — it deliberately excludes mortgage payments, since NOI is meant to measure the property's performance independent of how it's financed. Annual Cash Flow goes one step further, subtracting Annual Mortgage Payments from NOI to show what's actually left in the investor's pocket after debt service — the figure that feeds directly into Cash-on-Cash Return.
Does Purchase Price itself affect Annual NOI?
No. Annual NOI is built from Effective Gross Income (rent adjusted for vacancy) minus Annual Operating Expenses (taxes, insurance, maintenance, and management) — none of which reference Purchase Price directly in this calculator. Purchase Price only enters the calculation through Total Cash Invested (via Down Payment % and Closing Costs %), which affects Cash-on-Cash Return but not the underlying NOI or cash flow dollar figures.
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