Cash on Cash Return Calculator: Annual Cash Flow Over Cash Invested
Work out a property's cash-on-cash return — the headline yield metric for leveraged real estate investors who care about cash deposited per dollar of cash invested, not asset returns.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Cash on cash return | Non-yield share |
|---|---|---|
| $8k flow · $80k invested | 10.00% | 90.00% |
| $15k · $100k | 15.00% | 85.00% |
| $3k · $50k (low cash-on-cash) | 6.00% | 94.00% |
| $25k · $120k (value-add) | 20.83% | 79.17% |
How This Calculator Works
Enter annual pre-tax cash flow (NOI minus debt service) and total cash invested (down payment, closing costs, initial reserves, out-of-pocket rehab). The calculator divides one by the other and multiplies by 100 to give cash-on-cash return.
The Formula
Part as a Percentage of a Whole
Part is the portion, Whole is the total it belongs to
Worked Example
A property producing $8,000 of annual cash flow on $80,000 of cash invested posts a 10% cash-on-cash return. That's the yield on your actual cash — separate from cap rate (which ignores leverage) and from total return (which adds principal pay-down and appreciation).
Key Insight
Cash-on-cash return is the leveraged investor's preferred metric because it captures what financing does to the yield. A 6% cap rate property bought with 25% down at a 5% mortgage rate often produces a 12%+ cash-on-cash return — the leverage amplifies the yield on equity. The trade-off: leverage cuts both ways, and a rate-and-cost cycle that pushes cap rate yield below mortgage rate flips cash-on-cash negative.
Frequently Asked Questions
How is cash-on-cash return calculated?
Divide annual pre-tax cash flow by cash invested, then multiply by 100. $8,000 of cash flow on $80,000 invested is a 10% cash-on-cash return.
How does cash-on-cash differ from cap rate?
Cap rate uses NOI against property price and ignores financing — a pure asset yield. Cash-on-cash uses cash flow (NOI minus debt service) against actual cash invested. Cap rate compares properties; cash-on-cash compares investments.
What is a good cash-on-cash return?
Stabilized residential rentals commonly target 8% to 12% cash-on-cash. Value-add and reposition deals aim for 12% to 20%+. Below 6% is typical in supply-constrained metros where appreciation dominates the total-return story.
Should I include appreciation?
No — cash-on-cash is a current-year cash yield only. Appreciation, principal pay-down, and tax benefits all factor into total return on equity (IRR), which is a separate calculation.
What goes into cash invested?
Down payment, closing costs (typically 2% to 5% of purchase price), initial reserves (3 to 6 months of expenses), and any rehab funded from your own pocket. Loan amount is not invested cash — only equity is.
Related Calculators
Methodology & Review
Cash-on-cash return is annual pre-tax cash flow divided by total cash invested, multiplied by 100. Cash flow is net operating income minus debt service. Cash invested includes down payment, closing costs, and initial reserves. The figure is current-year only — appreciation and equity buildup are separate.
Written by Ugo Candido · Last updated May 17, 2026.