What is the Cash-on-Cash Return Calculator?
The Cash-on-Cash Return Calculator divides annual pre-tax cash flow by the total cash actually invested in the scenario. It is a leveraged-investment measure and is different from cap rate, which compares NOI with property value before financing.
How does the Cash-on-Cash Return Calculator work?
The calculator adds the down payment, closing costs, rehab/startup cash and other cash invested, then divides annual pre-tax cash flow by that total. Negative cash flow produces a negative cash-on-cash return.
What formula or rule does it use?
Cash-on-cash return = annual pre-tax cash flow ÷ total cash invested × 100 The dynamic “How this answer was calculated” panel substitutes the values you enter into the rule after a valid calculation.
How should you use this calculator?
If you have not calculated annual cash flow yet, start with the Rental Property Calculator. Compare property operations with the Cap Rate Calculator, financing with the Mortgage Calculator, and purchase cash with the Closing Cost Calculator.
How should you understand the result?
The main result is an annual percentage based only on the cash flow and cash invested values you enter. It does not measure appreciation or total return.
What are the limitations?
Cash-on-cash return can omit appreciation, principal paydown, income taxes, depreciation, future capital expenditures and sale proceeds. Definitions of cash flow and cash invested can differ among investors.
Who can use this calculator?
Useful for investors comparing the current-year cash yield of leveraged real-estate scenarios using a consistent definition of cash invested.
Frequently asked questions about Cash-on-Cash Return
Sources and methodology
Methodology, terminology and consumer guidance are grounded in the following U.S. government or housing-finance references where applicable.