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Cash on cash return calculator

See the yearly return on the cash you actually put into a rental: pre-tax cash flow after the mortgage, divided by your down payment, closing costs and repairs.

By the Calcist team · Checked against known answers · Updated October 28, 2026

Private: calculated on your device. Nothing you type is sent anywhere.

Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.

Next: Compare with the all-cash return in the cap rate calculator, or see if a lender will accept the loan with the DSCR calculator.

What this calculator does

Cash-on-cash return measures what your own money earns. It takes the property's yearly cash flow after operating expenses and the loan payments, and divides it by the cash you put in. Unlike the cap rate, it includes the effect of financing.

How it's calculated

NOI = rent × 12 × (1 − vacancy %) + other income − operating expenses
Debt service = monthly payment × 12, payment = L × i ÷ (1 − (1 + i)−n)
Pre-tax cash flow = NOI − debt service
Cash invested = down payment + closing costs + repairs
Cash-on-cash return = pre-tax cash flow ÷ cash invested

Worked example

A $300,000 rental with 25% down ($75,000), $9,000 of closing costs and $6,000 of repairs: $90,000 invested. The $225,000 loan at 7% for 30 years costs $1,496.93 a month, or $17,963.16 a year.

Rent is $2,600 a month ($31,200 a year). With 5% vacancy you collect $29,640, and $9,600 of expenses leaves an NOI of $20,040.

Cash flow = 20,040 − 17,963.16 = $2,076.84
Cash-on-cash = 2,076.84 ÷ 90,000 = 2.31%

The same property bought with cash would have a 6.68% cap rate. Here the loan costs more than the property earns on the borrowed money, so leverage lowers the return.

Limitations

  • It's a first-year, pre-tax figure. Loan paydown, appreciation and tax effects such as depreciation aren't included; see IRS Publication 527 for rental tax rules.
  • It ignores the timing of cash flows. For multi-year returns use an IRR.
  • Include a reserve for big repairs in operating expenses, or the return will look better than it is.

Sources

How we checked this

Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:

  • $300,000, 25% down, $2,600 rent: cash-on-cash 2.31% ✓
  • Same: cash flow $2,076.84 on $90,000.00 ✓
  • Same: debt service $17,963.16 ✓
  • All cash: 7.61% ✓
  • Negative cash flow: −10.05% ✓

Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.

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Questions people ask

What is cash-on-cash return?

Yearly pre-tax cash flow divided by the total cash you invested. $2,076.84 of cash flow on $90,000 invested is 2.31%.

What is a good cash-on-cash return?

There's no official benchmark. Compare it with what the same cash could earn elsewhere at similar risk, and remember it leaves out appreciation and loan paydown.

How is cash-on-cash different from cap rate?

Cap rate ignores financing (NOI ÷ price). Cash-on-cash subtracts the loan payments and divides by only the cash you put in, so the loan terms change it.

Does cash invested include closing costs?

Yes. Count the down payment, closing costs, and any repairs or furnishing paid in cash before the property earns rent.

Can cash-on-cash return be negative?

Yes. If the loan payments are bigger than the NOI, cash flow is negative and so is the return.

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