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Finance Calc Kit
Real estate

Cash on Cash Return Calculator

Calculate cash-on-cash return rate, annual cash flow, or cash invested for real estate investment analysis.

Investment inputs

$
$

Cash-on-cash return

12.00%

Step-by-step calculation

Open to see the formula and substituted values.

  1. Cash-on-cash return formula

    COCR=Annual Cash FlowCash Invested×100\text{COCR} = \frac{\text{Annual Cash Flow}}{\text{Cash Invested}} \times 100

    $24,000.00 / $200,000.00 x 100 = 12.00%.

  2. Interpretation

    For every $1 invested, you earn $0.1200 per year. A return above 10% indicates a strong cash-flowing investment.

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How the cash-on-cash return calculator works

Cash-on-cash return (COCR) measures annual pre-tax cash flow relative to the cash you invested out of pocket. It is a levered metric favored by rental property investors because it reflects financing and down payment size. This tool solves for return rate, annual cash flow, or cash invested.

Unlike cap rate, cash-on-cash includes debt service. For unlevered property yield, use the capitalization rate calculator. For total return including appreciation, try the ROI calculator.

Cash-on-cash return formula

COCR=Annual Pre-Tax Cash FlowTotal Cash Invested×100\text{COCR} = \frac{\text{Annual Pre-Tax Cash Flow}}{\text{Total Cash Invested}} \times 100

Cash invested typically includes down payment, closing costs, and initial repairs. Annual cash flow is rental income minus operating expenses and mortgage payments, before income taxes.

Worked example: $24,000 cash flow on $200,000 invested

  1. Annual cash flow: $24,000
  2. Cash invested: $200,000
  3. Cash-on-cash return: ($24,000 / $200,000) x 100 = 12.00%
  4. Monthly cash flow: $24,000 / 12 = $2,000

A 12% cash-on-cash return means you earn $0.12 in annual pre-tax cash flow for every $1 of equity deployed, before accounting for appreciation or tax benefits.

Cash-on-cash vs cap rate

Cap rate ignores financing and shows unlevered property yield. Cash-on-cash return shows what your actual equity earns after mortgage payments. A property with a 6% cap rate might produce a 10% cash-on-cash return with favorable leverage, or a negative return if expenses and debt service exceed rent.

Frequently asked questions

What is a good cash-on-cash return?
Many rental investors target 8% to 12% cash-on-cash return, but acceptable returns depend on market, risk, and appreciation potential. Lower returns may still work in high-growth markets.
What counts as cash invested?
Include down payment, closing costs, renovation costs paid at purchase, and any reserves you consider permanently deployed. Exclude borrowed funds.
Is cash-on-cash return before or after taxes?
Cash-on-cash return is typically calculated on pre-tax cash flow. After-tax return requires estimating depreciation, deductions, and your marginal tax rate.
Does this include property appreciation?
No. Cash-on-cash return measures annual cash income only. Total return also includes equity buildup from principal paydown and market appreciation.
Are the results stored?
No. All math runs in your browser and inputs sync to the page URL.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.