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Cash-on-Cash Return Calculator
Cash-on-cash return is your annual pre-tax cash flow divided by the cash you invested, shown as a percentage. If a rental produces $6,000 of yearly cash flow and you put in $50,000, that's a 12% cash-on-cash return. Unlike cap rate, it accounts for financing — it's the return on your actual out-of-pocket cash.
Cash-on-Cash = Annual Pre-Tax Cash Flow ÷ Total Cash Invested
How it works
Cash-on-cash return answers the question that matters most on a leveraged deal: what is my money actually earning? It divides the annual cash flow a property produces — rent minus operating expenses and the loan payment — by the cash you put in (down payment, closing costs, and rehab).
Because it factors in financing, cash-on-cash differs from cap rate, which ignores the loan. Two investors can buy the same property at the same cap rate but earn very different cash-on-cash returns depending on how much they borrowed.
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Get started freeFrequently asked questions
- How do you calculate cash-on-cash return?
- Divide your annual pre-tax cash flow (rent minus operating expenses and debt payments) by the total cash you invested (down payment, closing costs, and rehab). For example, $6,000 of annual cash flow on $50,000 invested is a 12% cash-on-cash return.
- What is a good cash-on-cash return?
- It varies by market and risk, but many rental investors target somewhere around 8–12% or higher. BRRRR investors often aim much higher because they pull most of their capital back out, leaving little cash in the deal.
- How is cash-on-cash different from cap rate?
- Cap rate ignores financing and divides net operating income by the property value. Cash-on-cash factors in your loan and divides the after-debt cash flow by the cash you actually invested — so leverage changes it.