Crunch Cash-on-Cash Return Calculator
Measure a rental property's return on the cash you actually put in. Unlike cap rate, cash-on-cash accounts for your down payment, closing costs, and mortgage — so it tells you what your money is really earning.
| Down payment | $0 |
| Total cash invested | $0 |
| Annual pre-tax cash flow | $0 |
| Monthly cash flow | $0 |
How it works
Cash-on-cash return = Annual pre-tax cash flow ÷ Total cash invested. Total cash invested is your down payment plus closing costs (and any initial rehab). Cash flow is what's left after every expense, including the mortgage payment.
Formula & worked example
Formula: Cash invested = down payment (price × down-payment %) + closing costs. Cash-on-cash return = annual before-tax cash flow ÷ cash invested × 100.
Worked example: Buy at $300,000 with 25% down ($75,000) plus $6,000 of closing costs and you have $81,000 invested. Cash flow of $7,290 a year before tax gives 7,290 ÷ 81,000 = 9.00%.
Frequently asked questions
What is a good cash-on-cash return?
Many investors target 8–12% as a solid baseline for residential rentals, and want it to beat what that cash could earn elsewhere. Your personal target depends on risk tolerance and market — set it before you shop.
Cash-on-cash vs. cap rate — which matters more?
They answer different questions. Cap rate (financing-neutral) compares properties; cash-on-cash (financing-aware) judges your specific deal. Run both on every property you seriously consider.
Why does leverage change the return so much?
A smaller down payment means less cash invested, so the same cash flow produces a higher percentage return — but also higher risk, higher payments, and thinner margins if anything goes wrong. Try 10% vs 25% down above.
🏠 Compare properties properly
Pair this with the cap rate calculator to screen deals on both metrics.