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REAL ESTATE · INVESTOR TOOLCash-on-Cash Return Calculator
How hard is your cash working? Enter the price, down payment, loan, rent, vacancy and expenses to get your annual cash flow and cash-on-cash return — with the mortgage payment worked out from the standard formula and every line shown.
- 100% free, no sign-up
- True P&I mortgage math
- Full cash-flow breakdown
- Down payment $ or %
Annual pre-tax cash flow after the mortgage, divided by the cash you put in.
M = P × r / (1 − (1+r)−n), with the monthly rate and the term in months.
Everything you pay upfront counts — not just the down payment.
One year's cash only. Total return can be higher — or lower — than this number.
Your property & loan
Purchase price, or current market value if you already own it.
Loan amount: $160,000 (price minus down payment).
Closing costs and any upfront renovation both count as cash invested, on top of the down payment.
Fixed-rate, fully amortizing loan. 30 years is standard; a 15-year term means higher monthly payments but faster equity build-up.
Total rent if every unit were occupied, before vacancy loss and before any expenses.
The share of rent you expect to lose to empty units. 5% is a common planning figure — use your market's reality if you know it.
Operating expenses (annual)
Enter each cost as a yearly dollar amount. Everything here reduces NOI.
Management is often around 8–10% of rent — enter the dollar amount, not the percentage. Only count costs the owner pays, not costs tenants pay directly. With the defaults above, total operating expenses are $6,000 a year.
Please note: this is an estimate from the numbers you enter, assuming a fixed-rate, fully amortizing loan and a single year of pre-tax cash flow. Real cash flow depends on actual rents, real vacancy and real bills — and this figure excludes appreciation, tax effects and equity build-up. Treat the result as a comparison tool, not investment advice.
How this cash-on-cash calculator works
Four steps, in the order the formula runs — every line is shown, so you can check each number.
Enter price & financing
Price minus down payment is the loan. The standard P&I formula turns the loan, rate and term into a monthly payment.
Work out NOI
Vacancy loss comes off the rent first, giving effective gross income. Then every operating expense comes off. What is left is NOI.
Subtract debt service
Twelve monthly payments come off NOI. What is left is your annual cash flow — positive, or negative if the mortgage eats more than the property earns.
Divide by cash invested
Annual cash flow divided by down payment plus closing costs plus upfront renovation, times 100, is the cash-on-cash return.
What cash-on-cash counts — and what it leaves out
The return is only as honest as the lines you put in. Financing counts here; future gains do not.
Counts — in the math
- Rent after vacancy loss (effective gross income)
- All operating expenses — taxes, insurance, maintenance, management, HOA, utilities
- Mortgage principal and interest as annual debt service
- Down payment, closing costs and upfront renovation as cash invested
Does not count — excluded
- Appreciation — property value growth is not cash in hand this year
- Tax deductions and benefits — this is a pre-tax figure
- Equity build-up — the part of each payment that reduces the loan balance
- Future rent growth or future rate changes
Worked examples
Three properties, worked through the same formula. Same math every time: NOI minus annual debt service, divided by cash invested.
| Property | Price | Cash invested | NOI | Annual cash flow | Cash-on-cash |
|---|---|---|---|---|---|
| Single-family rental | $200,000 | $45,000 | $16,800 | $4,026 | 8.95% |
| Duplex, thin return | $350,000 | $100,500 | $22,480 | $2,570 | 2.56% |
| Condo with high HOA fees | $180,000 | $22,000 | $10,920 | −$2,342 | −10.64% |
Example 1: $200,000 price, 20% down ($40,000) plus $5,000 closing costs = $45,000 cash invested. A $160,000 loan at 7% for 30 years costs $1,064 a month, or $12,774 a year. Rent of $24,000 less 5% vacancy ($1,200) gives $22,800; $6,000 of expenses leaves $16,800 of NOI; $16,800 − $12,774 = $4,026 of cash flow, and $4,026 / $45,000 = 8.95%. Example 2: $350,000 price, 25% down ($87,500) plus $8,000 closing and $5,000 renovation = $100,500 invested. A $262,500 loan at 6.5% for 30 years costs $1,659 a month ($19,910 a year). Rent of $36,000 less 7% vacancy ($2,520) gives $33,480; $11,000 of expenses leaves $22,480 of NOI; $22,480 − $19,910 = $2,570, and $2,570 / $100,500 = 2.56% — positive, but thin. Example 3: $180,000 price, 10% down ($18,000) plus $4,000 closing = $22,000 invested. A $162,000 loan at 7.25% for 30 years costs $1,105 a month ($13,262 a year). Rent of $21,600 less 5% vacancy ($1,080) gives $20,520; $9,600 of expenses (including $3,600 of HOA fees) leaves $10,920 of NOI; $10,920 − $13,262 = −$2,342, and −$2,342 / $22,000 = −10.64% — this property loses cash every year.
Cash-on-cash questions, answered
What is cash-on-cash return?
Cash-on-cash return is the annual pre-tax cash flow a rental property produces after mortgage payments, divided by the cash you invested — down payment plus closing costs plus any upfront renovation — expressed as a percentage. It measures the return on your cash, not on the full property price.
What is the cash-on-cash return formula?
Cash-on-cash return = annual cash flow / total cash invested x 100. Annual cash flow = NOI − annual debt service. NOI = (gross rent − vacancy loss) − operating expenses. The monthly mortgage payment uses the standard formula M = P x r / (1 − (1+r)−n), where P is the loan amount, r is the annual interest rate divided by 12, and n is the loan term in months.
What is a good cash-on-cash return?
There is no official good number. As a rough educational guide, many rental investors look for around 8% or higher, while 4% to 8% is a commonly seen range — but those figures are typical, not guaranteed. Below 4% the return is thin, and below 0% the property loses cash every year. Judge any figure against similar properties in the same market and weigh the risk behind it.
Cash-on-cash return vs cap rate: what is the difference?
Cap rate measures the property itself: NOI divided by the full property value, with no mortgage involved. Cash-on-cash return measures your cash: annual cash flow after mortgage payments, divided by the cash you invested. Use cap rate to compare properties, and cash-on-cash to compare financing options on one property.
Does cash-on-cash return include appreciation or tax savings?
No. Cash-on-cash return counts only one year's pre-tax cash flow. It does not include property appreciation, tax deductions or the equity built up as the loan balance falls. A property's total return can therefore be higher than its cash-on-cash return suggests — but cash-on-cash alone does not show it.