Cash-on-Cash Return Calculator

What Is Cash-on-Cash Return?

Cash-on-cash return measures the annual return on the actual cash you invested. The formula: CoC = Annual Pre-Tax Cash Flow ÷ Total Cash Invested × 100. Unlike cap rate (which ignores financing), CoC accounts for your mortgage and tells you what your out-of-pocket dollars actually earn.

What Is a Good Cash-on-Cash Return?

Most investors target 8-12% or higher. Below 5% is generally weak for the effort of owning property. Above 15% usually involves higher risk or creative financing like the BRRRR method. For a complete property analysis including expenses, vacancy, and CapEx, use our rental property calculator.

Cash-on-Cash vs. Cap Rate

Cap rate measures the property's return independent of financing. Cash-on-cash measures your return on the cash you actually put in. They answer different questions. Cap rate is useful for comparing properties. Cash-on-cash is useful for comparing how different financing structures affect your return on the same property.

For example, a property with a 6% cap rate might deliver a 10% cash-on-cash return with a 25% down payment, or a 14% cash-on-cash return with a 20% down payment — because more leverage means less cash invested for the same cash flow. Use our cap rate calculator to compare properties before factoring in financing.

How to Improve Your Cash-on-Cash Return

There are really only three levers: increase rent, decrease expenses, or reduce the cash you put in. Increasing rent comes from finding underpriced properties or making value-add improvements. Decreasing expenses means shopping insurance, managing efficiently, and minimizing vacancy. Reducing cash invested means using strategies like the BRRRR method to pull your cash back out through a refinance.