Cash-on-Cash Return Calculator

Find your real return on the actual cash you put into a deal — after financing.

Cash-on-Cash Return Tool

Cash-on-Cash Return Calculator

Measure real pre-tax yield on total invested cash after financing

1. Acquisition & Total Cash Invested

Purchase Price ($)

Down Payment (%)

Down Payment: $300,000

Closing & Financing Costs ($)

Upfront Repairs & Capex ($)

2. Income & Debt Service

Annual NOI ($)

Annual Debt Service (P&I) ($)

Cash-on-Cash Analysis

Cash-on-Cash Return

9.09%

Positive Leverage: Return exceeds Cap Rate (7.00%)

Total Cash Invested:$330,000

└ Down Payment:$300,000

└ Closing Costs:$15,000

└ Repairs/Capex:$15,000

Annual Pre-Tax Cash Flow:$30,000

Unleveraged Cap Rate:7.00%

Key take-away: Cash-on-cash return evaluates efficiency specifically on out-of-pocket equity invested.

What Is Cash-on-Cash Return and Why It Matters

Cash-on-cash return measures the annual pre-tax cash flow you actually receive, relative to the actual cash you put into the deal — your down payment, closing costs, and any upfront capital improvements. Unlike cap rate, it accounts for leverage, which means it's the number that tells you how hard your invested dollars are working, not how the property performs in the abstract.

The Formula

Cash-on-Cash Return = Annual Pre-Tax Cash Flow / Total Cash Invested × 100%

Annual Cash Flow:NOI minus annual debt service (loan payments)

Total Cash Invested:Down payment + closing costs + any immediate capital expenditures — not the full purchase price

A Real Example

You buy a $1,200,000 property with a 25% down payment ($300,000) plus $30,000 in closing costs and immediate repairs — total cash invested is $330,000. Annual NOI is $84,000, and your annual loan payment (debt service) is $54,000. Annual Cash Flow = $84,000 − $54,000 = $30,000 Cash-on-Cash Return = $30,000 / $330,000 = 9.1% Compare that to the property's cap rate ($84,000 / $1,200,000 = 7.0%) — the leverage here is boosting your cash return above the unleveraged cap rate, because the cost of debt is lower than the property's yield.

Frequently Asked Questions

Why is cash-on-cash return usually different from cap rate?

Cap rate assumes no financing. Cash-on-cash return reflects leverage. If your loan's interest rate is lower than the property's cap rate, leverage typically boosts your cash-on-cash return above the cap rate (positive leverage). If the interest rate is higher, it works against you (negative leverage).

What counts as "cash invested"?

Down payment, closing costs, loan origination fees, and any immediate repairs or upgrades needed before the property is rent-ready. It does not include the financed portion of the purchase price.

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

Not necessarily — a very high cash-on-cash return can also signal high leverage and higher risk (a bigger loan relative to a smaller down payment). Look at it alongside DSCR to understand your risk cushion.

Related Calculators

Cap Rate Calculator NOI Calculator DSCR Calculator