Cash-on-Cash Return Calculator
Measure the annual return on the actual cash you put into a rental — the single most useful number for comparing leveraged deals.
Total Cash Invested
Cash-on-Cash Return
8.00%
$6,000 annual cash flow ÷ $75,000 cash invested
How Cash Flow Changes Your Return
Holding $75,000 invested constant
| Annual Cash Flow | Monthly | Cash-on-Cash |
|---|---|---|
| $3,000 | $250 | 4.00% |
| $4,500 | $375 | 6.00% |
| $6,000 (your input) | $500 | 8.00% |
| $7,500 | $625 | 10.00% |
| $9,000 | $750 | 12.00% |
| $12,000 | $1,000 | 16.00% |
What cash-on-cash return tells you
Cash-on-cash return is the percentage you earn each year on the real money you put into a deal: annual pre-tax cash flow ÷ total cash invested. Cash invested is your down payment plus closing costs plus any upfront rehab. Cash flow is what's left after operating expenses and the mortgage.
Unlike cap rate, which ignores financing, cash-on-cash rewards smart leverage. Putting less down (a bigger loan) can lift your cash-on-cash if the property still cash flows — though it also raises your risk if rents dip or rates reset. That's why the table above matters: a few hundred dollars of monthly cash flow can swing the return by several percentage points.
Many buy-and-hold investors target an 8–12% cash-on-cash return, but the right benchmark depends on your market and risk tolerance. To see where the cash flow number comes from, run the property through our mortgage calculator first, then dig into the full framework in our rental property ROI analysis guide and the investment property mortgage guide.
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Frequently Asked Questions
What is a good cash-on-cash return?
Many rental investors aim for 8–12%, but it varies by market and strategy. Cash-flow-focused investors in affordable markets may demand 10%+, while investors in high-appreciation metros accept lower cash-on-cash because they expect the gains to come from rising property values.
How is cash-on-cash different from ROI?
Cash-on-cash looks only at annual cash flow versus cash invested. Total ROI also folds in loan paydown (equity you gain as the mortgage shrinks), appreciation, and tax benefits. Cash-on-cash is the cleanest year-one yardstick; total ROI captures the full long-term picture.
Should I use pre-tax or after-tax cash flow?
The standard cash-on-cash calculation uses pre-tax cash flow, because everyone's tax situation differs. This keeps deals comparable. If you want a personalized after-tax figure, subtract your estimated tax on the rental income (after depreciation) before dividing by cash invested.
Why does a bigger down payment lower my return?
More money down means more cash invested in the denominator, so the same cash flow spreads across a larger base and the percentage falls. It also lowers your mortgage payment, which raises cash flow somewhat — but the denominator effect usually wins, which is why leverage tends to boost cash-on-cash.