Cash-on-Cash Return Calculator
Measure annual cash flow against the actual cash you invested.
Please note: Estimates only, not investment or legal advice. Property markets, taxes, fees and lending rules vary by location and change over time. Verify figures with a qualified professional before committing.
What the Cash-on-Cash Return Calculator does
Cash-on-cash return divides annual pre-tax cash flow by the cash you actually invested. Unlike cap rate it includes financing, so it shows what leverage does to your return — magnifying it when rent comfortably covers the mortgage, and destroying it when it does not.
Formula
Monthly cash flow = Effective rent − Operating expenses − Mortgage paymentTotal cash invested = Down payment + Closing costs + RenovationCash-on-cash return = (Annual cash flow ÷ Total cash invested) × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Purchase price | selected currency | Yes | Accepts 0 or more. |
| Down payment | selected currency | Yes | Accepts 0 or more. |
| Closing and purchase costs | selected currency | Optional | Accepts 0 or more. |
| Renovation costs | selected currency | Optional | Accepts 0 or more. |
| Monthly rent | selected currency | Yes | Accepts 0 or more. |
| Monthly operating expenses | selected currency | Yes | Excluding mortgage. Accepts 0 or more. |
| Mortgage interest rate | % | Yes | — |
| Mortgage term | years | Yes | Accepts 1 or more. |
| Vacancy allowance | % | Optional | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Purchase price, Down payment, Monthly rent and Monthly operating expenses and 2 more.
- Optionally add Closing and purchase costs, Renovation costs and Vacancy allowance.
- Select Calculate.
Worked example
A $320,000 property, $64,000 down, $9,000 costs, $1,850 rent, $520 expenses, 6.5% over 30 years.
- Price
- 320000
- Down
- 64000
- Costs
- 9000
- Rent
- 1850
- Expenses
- 520
- Rate
- 6.5
Mortgage $1,618, effective rent $1,758, cash flow −$380 a month — a negative cash-on-cash return.
Frequently asked questions
What is a good cash-on-cash return?
Many investors target 8–12%. Below the risk-free rate, you are taking property risk for no premium, and appreciation has to carry the whole investment case.
Why does more leverage sometimes lower the return?
Because the mortgage payment grows faster than the tax benefit. Once the payment exceeds net rent, cash flow turns negative and the return goes with it.