Cash on cash return calculator
Estimate the yearly cash a rental puts in your pocket as a share of the cash you put into it. Enter your down payment and upfront costs, the rent, expenses and mortgage payment.
Your results
EstimateCash on cash return: 8.57%
- Annual cash flow
- $6,000.00
- Monthly cash flow
- $500.00
- Total cash invested
- $70,000.00
Results are estimates for planning only. They are not legal, tax or investment advice, and they apply no state or local rules. Check your lease, your local laws and a qualified professional before you rely on a number.
How cash on cash return is calculated
Cash on cash return = annual pre-tax cash flow / total cash invested
Annual cash flow is the rent minus operating expenses and the mortgage payment, over 12 months. Total cash invested is the money you paid out of pocket: the down payment, closing costs and upfront repairs.
Cash on cash return measures the cash yield on your own money, so it moves with your financing. Equity from paying down the loan and appreciation are left out; the rental property ROI calculator adds them.
Worked example
You put $60,000 down, pay $6,000 in closing costs and $4,000 in repairs. The rent is $2,500 a month, operating expenses are $900 and the mortgage is $1,100.
- Total cash invested: $60,000 + $6,000 + $4,000 = $70,000.
- Monthly cash flow: $2,500 - $900 - $1,100 = $500, or $6,000 a year.
- Cash on cash return: $6,000 / $70,000 = 0.0857.
The estimated cash on cash return is 8.57%.
Frequently asked questions
What is cash on cash return?
Cash on cash return is a rental's annual pre-tax cash flow divided by the cash you invested. It shows the yearly cash yield on the money you put in.
How is it different from cap rate?
Cap rate ignores financing and compares NOI with the property's value. Cash on cash return subtracts the mortgage and compares cash flow with your own cash, so a loan changes it.
Can cash on cash return be negative?
Yes. If the rent does not cover operating expenses and the mortgage, cash flow is negative and so is the return.
Does it include taxes?
No. It is a pre-tax measure. Your actual return after income taxes and depreciation depends on your tax situation.
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