ROI Math

Real estate calculator

Cash on Cash Return Calculator

A cash on cash return calculator measures the annual cash yield on the money you actually invest in a rental property, after mortgage payments. Set your down payment, interest rate, and loan term below to see cash-on-cash return, monthly cash flow, and debt service — free and with no sign-up.

Last updated 2026-05-31

Investment Return Calculator
Live NOI, cap rate, financing, and cash-flow underwriting.
$2,865/mo
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Annual total: $42,000

Advanced
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%
%
yr
Monthly debt
$4,135
Monthly cash flow
$2,865
Cash on cash
16.18%

Income allocation

Gross income, expenses, and net return split.

Operating expenses$42,000
Debt service$49,618
Net cash flow$34,382
Loan amount
$637,500
Annual cash flow
$34,382

Cash-on-cash return formula

Cash-on-cash return equals annual pre-tax cash flow divided by total cash invested:

Cash-on-cash = (Annual cash flow ÷ Cash invested) × 100

Annual cash flow is NOI minus mortgage debt service. This calculator models cash invested as the down payment, so a $12,000 annual cash flow on a $212,500 down payment is a 5.65% cash-on-cash return.

How leverage changes your return

Adjusting the interest rate, loan term, or down payment updates debt service and shows how leverage shifts monthly cash flow. Borrowing can amplify returns when the property's cap rate exceeds the loan's cost, and erode them when it does not.

Because it accounts for financing, cash-on-cash return is most useful for evaluating a specific deal structure rather than comparing properties head-to-head.

How to calculate cash-on-cash return in 3 steps

  1. Subtract operating expenses from gross annual income to get NOI.
  2. Subtract annual mortgage debt service from NOI to get annual pre-tax cash flow.
  3. Divide annual cash flow by total cash invested (down payment plus closing costs) and multiply by 100.

Frequently asked questions

What is cash-on-cash return?

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Cash-on-cash return is the annual pre-tax cash flow a property produces divided by the total cash you invested, expressed as a percentage. It measures the cash yield on the actual money you put into a deal — typically the down payment plus closing costs — after mortgage payments.

How do you calculate cash-on-cash return?

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Divide annual pre-tax cash flow by the total cash invested, then multiply by 100. Annual cash flow is net operating income minus annual mortgage debt service. For example, $12,000 of annual cash flow on a $212,500 down payment is a 5.65% cash-on-cash return.

What is a good cash-on-cash return?

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Many rental investors target a cash-on-cash return of 8% to 12%, though acceptable ranges vary by market and strategy. Some investors accept lower cash-on-cash returns (4%-7%) in appreciating markets, while value-add or higher-risk deals may aim for 12%+. The right target depends on your goals and alternatives.

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

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Cap rate measures unleveraged income yield on the full purchase price and ignores financing. Cash-on-cash return measures the leveraged cash yield on only the cash you invest, after mortgage debt service. Use cap rate to compare assets and cash-on-cash to evaluate how a specific loan affects your return.

How does the down payment affect cash-on-cash return?

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A larger down payment reduces the loan balance and monthly debt service, which raises monthly cash flow but also increases the cash invested in the denominator. As a result, cash-on-cash return does not always improve with a bigger down payment — leverage can raise returns when the cap rate exceeds the loan's cost.

This cash-on-cash return calculator is for educational estimates only and is not financial or investment advice. It models cash invested as the down payment; add closing costs and reserves for a more complete picture.