Cash on Cash Return Calculator
Calculate the cash-on-cash return on a rental property. Enter net operating income, mortgage payments and cash invested to see your real cash return.
Updated 2026-06-14 · Free · No sign-up · Runs privately in your browser
Show the formula & steps
How the Cash on Cash Return Calculator Works
Cash-on-cash return measures the annual pre-tax cash flow a property generates relative to the actual cash you invested. Unlike cap rate, it accounts for your mortgage, so it shows the return on the money you really put in. Enter the annual net operating income, annual mortgage payments, and your total cash invested, and the calculator returns the cash flow and the cash-on-cash return.
The Formula
First find annual pre-tax cash flow:
Annual cash flow = net operating income − annual mortgage payments
Then divide by the cash you invested:
Cash-on-cash return (%) = annual cash flow ÷ total cash invested × 100
Total cash invested is your down payment plus closing costs, loan fees and any upfront work, not the full purchase price.
Worked Example
Suppose a rental produces 24,000 dollars in net operating income, has 18,000 dollars in annual mortgage payments, and you invested 90,000 dollars in cash:
- Annual cash flow = 24,000 − 18,000 = 6,000 dollars
- Cash-on-cash return = 6,000 ÷ 90,000 × 100 = 6.67%
- Monthly cash flow = 6,000 ÷ 12 = 500 dollars
The property returns 6.67% on the cash you actually invested, separate from any appreciation or principal paydown.
Cash-on-Cash vs Other Metrics
| Metric | Numerator | Denominator |
|---|---|---|
| Cap rate | Net operating income | Property value |
| Cash-on-cash return | Cash flow after mortgage | Total cash invested |
| Total ROI | Cash flow + appreciation + paydown | Total cash invested |
Tips for an Accurate Result
- Capture every dollar invested. Down payment, closing costs, lender points and initial repairs all belong in cash invested.
- Use full-year debt service. Add up twelve months of principal and interest for the mortgage figure.
- Keep NOI realistic. Net operating income already subtracts operating expenses and vacancy, but not the mortgage.
- Look beyond year one. Rent growth and principal paydown usually lift returns over time, which this snapshot does not show.
This tool is for estimation and comparison. Verify income, debt and investment figures before making a decision.
Frequently asked questions
How do you calculate cash-on-cash return?+
Divide annual pre-tax cash flow by the total cash you invested, then multiply by 100. If a property nets 6,000 dollars cash flow on 90,000 dollars invested, the cash-on-cash return is 6,000 / 90,000 x 100 = 6.67%.
What is the difference between cash-on-cash return and cap rate?+
Cap rate divides net operating income by the full property value and ignores financing. Cash-on-cash return divides the cash flow after mortgage payments by the actual cash you put in, so it reflects the effect of leverage.
What counts as total cash invested?+
Include your down payment, closing costs, loan fees and any upfront repairs or renovation before renting. It is the real out-of-pocket cash needed to get the property producing income.
What is a good cash-on-cash return?+
Many investors aim for 8% to 12%, though acceptable levels vary by market and risk. A higher figure means the property returns more of your invested cash each year, but always weigh it against risk and appreciation.
Does cash-on-cash return include appreciation?+
No. It measures only annual cash flow against cash invested. It ignores property appreciation, mortgage principal paydown and tax benefits, so total return on an investment is usually higher than the cash-on-cash figure.