Landlord Calculator

Cash-on-Cash Return Calculator

See the return on the money you actually put in. Cash-on-cash takes your annual cash flow after the mortgage and divides it by your real out-of-pocket investment.

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Opens live in the Rental Flow app, no account needed.

What this calculator does

Where cap rate ignores financing, cash-on-cash is all about it. It measures the annual pre-tax cash flow a property throws off, after the mortgage payment, against the cash you invested to acquire it (down payment plus any up-front costs). It's the number that answers "what is my money actually earning here?"

The formula

Cash-on-cash = Annual Cash Flow ÷ Cash Invested

Annual cash flow is rental income minus operating expenses minus annual debt service (your mortgage payments). Cash invested is the purchase price minus the loan amount: your down payment, the part of the deal you funded yourself.

Worked example

$250,000 property, $200,000 loan at 6.5%, 30 years

Purchase price	$250,000
Loan amount	$200,000
Cash invested (down payment)	$50,000
Annual rental income	$24,000
Annual operating expenses	$8,400
Annual mortgage payments	$15,170
Annual cash flow	$430
Cash-on-cash return	0.86%

This example is deliberately tight. It shows how a thin margin and a high rate can leave a leveraged deal barely cash-flow positive. Change the down payment, rate, or rent and watch the return move.

What is a good cash-on-cash return?

Many rental investors look for a cash-on-cash return in the 8% to 12% range, but what counts as good depends on your market and your goals. In expensive, appreciating areas, investors often accept 4% to 6% because they expect the bulk of their gain from rising property values. In cheaper cash-flow markets, 10% or more is common because appreciation is slower.

Because cash-on-cash uses your actual cash invested and your actual loan payments, it is the truest measure of what your money earns year one. Compare it against what the same cash could earn elsewhere, then decide whether the property's extra effort and risk justify the difference.

Try it with your own numbers →

Frequently asked questions

What is the difference between cash-on-cash return and cap rate?

Cap rate ignores financing and measures a property's operating return against its full purchase price. Cash-on-cash return uses your actual cash invested and subtracts your real mortgage payments, so it reflects what a leveraged buyer actually earns. Cap rate compares properties; cash-on-cash compares your money's performance.

Does cash-on-cash return include appreciation?

No. Cash-on-cash measures only the annual cash flow you receive relative to the cash you put in. It does not count loan paydown or property appreciation. For a return that includes those, use a total ROI calculation over your expected holding period.

How do I calculate cash invested?

Add up every dollar of your own money that goes into the deal: down payment, closing costs, and any upfront repairs or capital improvements needed to make the property rent-ready. That total is the denominator in the cash-on-cash formula.

Is a higher cash-on-cash return always better?

Usually it is attractive, but a very high figure can come from heavy leverage, which raises risk if rents fall or a unit sits vacant. Look at cash-on-cash alongside your break-even ratio and debt coverage so you know how much cushion you have.