Cash on Cash Return Calculator
Measure your annual cash return relative to the actual cash you invested.
Down payment + closing costs + renovation costs
Enter your cash invested and rental income to see results
How Cash-on-Cash Return is Calculated
Cash-on-Cash Formula
Example: $80,000 invested (deposit + costs), $24,000 rent, $5,000 expenses, $15,000 mortgage: ($24,000 − $5,000 − $15,000) / $80,000 × 100 = 5.00% cash-on-cash return.
What is Cash-on-Cash Return?
Cash-on-cash return measures the annual pre-tax cash flow you receive relative to the actual cash you put into the deal. Unlike cap rate, it includes mortgage payments — making it the most practical metric for leveraged property investors.
Why it matters for leveraged investors: With a 20% deposit, you control 100% of the property but only invested 20% in cash. If the property generates positive cash flow after all costs including mortgage, your cash-on-cash return can significantly exceed the cap rate. This is the power of leverage.
What counts as "cash invested": Your down payment, all closing costs (stamp duty, legal fees, inspections), and any immediate renovation costs. The mortgage principal is NOT included — only actual out-of-pocket cash.
A cash-on-cash return of 8–12% is generally considered good. Returns below 5% may not adequately compensate for the risk and effort of managing rental property. Above 12% is excellent but may indicate higher risk or significant value-add opportunity.
What this calculator doesn't include
This gives you year-one cash return only. It doesn't account for appreciation, equity buildup through mortgage paydown, tax benefits, or country-specific costs. For complete multi-year analysis — use our full ROI calculator.
Include Country-Specific Costs & Projections
Add exact closing costs, 10-year projections with equity growth, and exit scenarios with capital gains tax.
Frequently Asked Questions
What is a good cash-on-cash return? ▼
Generally, 8–12% is considered good for residential rental properties. Above 12% is excellent. Below 5% may not justify the effort of property management. These benchmarks shift with interest rates — in high-rate environments, 6–8% may be considered strong.
What is included in "total cash invested"? ▼
Your down payment (deposit), all closing costs (stamp duty/transfer tax, legal fees, inspections, loan origination fees), and any immediate renovation costs. Do NOT include the mortgage amount — only the cash that came out of your pocket. This is what makes cash-on-cash different from cap rate.
Cash-on-cash return vs cap rate — what's the difference? ▼
Cap rate ignores financing — it's NOI divided by total property value. Cash-on-cash includes mortgage payments and divides by your actual cash outlay. A 5% cap rate property with 80% leverage could deliver 10%+ cash-on-cash because you only invested 20% of the price but collect rent on the whole property.
How do you calculate cash-on-cash return? ▼
Cash-on-Cash = (Annual Rental Income − Operating Expenses − Annual Mortgage Payments) / Total Cash Invested × 100. For example: $24,000 income − $5,000 expenses − $15,000 mortgage = $4,000 cash flow. Divided by $80,000 invested = 5.0% cash-on-cash return.