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Cash-on-Cash Return Calculator

Calculate the annual cash-on-cash return on the actual cash you invested in a property.

calculatorPublished 2026/05/23Last verified 2026/06/07

Cash-on-Cash Return Calculator

Cash-on-cash return = annual pre-tax cash flow ÷ total cash invested × 100.

Cash-on-cash return

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What is cash-on-cash return?

Cash-on-cash return measures the annual pre-tax cash flow a property generates relative to the cash you actually put in. Because it accounts for financing, it reflects the real return on your out-of-pocket investment — unlike cap rate, which ignores leverage.

The formula

Cash-on-cash return = Annual pre-tax cash flow / Total cash invested × 100

Annual cash flow is NOI minus debt service. Total cash invested is your down payment plus closing costs and any upfront repairs.

How to use it

  1. Enter the annual pre-tax cash flow.
  2. Enter the total cash invested.

For example, $12,000 of annual cash flow on $150,000 invested is an 8.00% cash-on-cash return.

What it leaves out

Cash-on-cash return ignores appreciation, loan paydown (equity gain), and tax effects. Use it alongside cap rate and a full pro forma for a complete picture.

FAQs

How is cash-on-cash different from cap rate?
Cap rate measures return on the full purchase price with no financing. Cash-on-cash return measures pre-tax cash flow relative to the actual cash you invested, so it reflects the effect of leverage (your mortgage).
What goes into total cash invested?
Your down payment plus closing costs and any upfront repairs or improvements needed to make the property rent-ready. It is the real out-of-pocket cash, not the property price.
What is a good cash-on-cash return?
It varies by market and risk tolerance. Many buy-and-hold investors target somewhere in the 6–12% range, but a lower return may be acceptable for a lower-risk asset or strong appreciation potential.
Can cash-on-cash return be negative?
Yes. If debt service and expenses exceed income, cash flow is negative, and so is the cash-on-cash return — the property costs you money to hold each year.

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