Cash-on-Cash Return Calculator
Calculate cash-on-cash return from annual cash flow and cash invested. Free real estate calculator.
How it works
Cash-on-cash return = (Annual Cash Flow ÷ Cash Invested) × 100. This measures the return on your actual out-of-pocket investment, accounting for financing.
Example
Annual cash flow: $6,000, Cash invested: $60,000 → $6,000 ÷ $60,000 × 100 = 10%.
FAQ
What is a good cash-on-cash return?
Cash-on-cash returns of 8-12% are generally considered good, but it depends on your market, property type, and risk tolerance.
How is cash-on-cash different from cap rate?
Cash-on-cash considers financing by using actual cash invested, while cap rate uses the full purchase price regardless of financing.
What counts as cash invested?
Down payment, closing costs, initial repairs, and any other out-of-pocket expenses to acquire and prepare the property.
Should I include principal paydown in cash flow?
No, cash-on-cash return typically uses after-tax cash flow only, not including principal reduction or appreciation.
Can cash-on-cash return be negative?
Yes, if your annual cash flow is negative (expenses exceed income), your cash-on-cash return will be negative.