Last updated October 10, 2026 · Report an error
Cash-on-cash return measures a rental property's annual cash flow against the actual cash you put in — down payment, closing costs, renovation — rather than the property's full purchase price, giving a truer picture of how hard your invested dollars are working.
This calculator finds your cash-on-cash return from your cash invested and annual cash flow.
How it works
Enter your down payment plus any closing and renovation costs, then your annual rental income, operating expenses, and mortgage payment. The calculator totals your cash invested, finds your annual pre-tax cash flow, and divides one by the other.
- Enter down payment.
- Enter closing costs (optional).
- Enter renovation costs (optional).
- Enter annual rental income.
- Enter annual operating expenses.
- Enter annual mortgage payment (debt service).
- Click Calculate to see your results.
Examples
$75,000 invested, $6,000 cash flow
Investing $75,000 total (down payment, closing costs, renovation) and netting $6,000 in annual pre-tax cash flow gives an 8% cash-on-cash return.
Who should use it
- Comparing multiple potential rental property purchases by how efficiently they use invested cash.
- Evaluating whether a property's financing structure produces an attractive return on your investment.
Industry applications
- Real estate investing
- Rental property analysis
Advantages
- Directly measures return on your actual out-of-pocket investment, not the full property value.
- Includes closing and renovation costs, not just the down payment.
Limitations
- Uses pre-tax cash flow — doesn't account for the tax benefits or liabilities that affect your true after-tax return.
Common mistakes to avoid
- Confusing cash-on-cash return with cap rate — they measure different things and aren't interchangeable.
- Forgetting to include closing costs and renovation costs in the total cash invested figure.
Best practices
- Calculate both cap rate and cash-on-cash return for a property — cap rate shows how the property performs unlevered, while cash-on-cash shows how your specific financing affects your actual return.
Tips
- Pair this with the site's Rental Property Cap Rate Calculator — cash-on-cash return shows your levered, cash-invested return, while cap rate shows the property's unlevered return independent of financing.