Cash-on-Cash Return Calculator
How much annual cash flow are you earning on the cash you actually invested?
Cash-on-Cash Return = Annual Net Cash Flow ÷ Total Cash Invested × 100
Calculate Return →Calculate Your Return
Results update as you change any input.
Estimates are for educational purposes only · Not investment advice
Estimated Cash-on-Cash Return
| Metric | Amount |
|---|---|
| Annual Net Cash Flow | $7,400 |
| Down Payment | $80,000 |
| Closing Costs | $12,000 |
| Initial Repairs | $8,000 |
| Total Cash Invested | $100,000 |
| Cash-on-Cash Return | 7.4% |
Cash-on-Cash vs. Cap Rate
Cap Rate ignores financing and compares NOI with property value.
Cash-on-Cash Return includes financing impact and compares actual annual cash flow with the investor's cash invested.
Calculate Cap Rate →Educational Use Only: Reaixo provides estimates and scenario calculations for informational and educational purposes. Reaixo is not acting as a real-estate broker, appraiser, lender, contractor, financial advisor, accountant, tax advisor, or investment advisor. ARV, repair costs, financing costs, selling expenses, rents and investment performance can vary materially. The 70% rule is a simplified heuristic and is not appropriate for every property, market, investor, or transaction. Calculator results are not an appraisal, investment recommendation, offer recommendation, or guarantee of profit.
The Formula This Calculator Uses
$7,400 annual net cash flow, $100,000 total cash invested ($80,000 down payment + $12,000 closing costs + $8,000 repairs):
Cash-on-Cash Return = $7,400 ÷ $100,000 × 100 = 7.4%
Why Every Upfront Dollar Counts
Cash-on-cash return is only as accurate as your total cash invested figure — and it's easy to under-budget repairs before closing. Using the numbers currently entered above:
- As entered: $100,000 total cash invested → 7.4% cash-on-cash return.
- If your initial repairs ran double budget (an extra $8,000 out of pocket): $108,000 total cash invested → 6.9% cash-on-cash return.
The annual cash flow in the numerator doesn't change — only the denominator does. That's why experienced investors pad their repair and closing cost estimates before committing cash: an optimistic "total cash invested" number makes the return look better than it will actually be on closing day.
What Is a Good Cash-on-Cash Return?
There's no universal target — it depends on your market, financing and goals. As a general reference point commonly used by investors:
- Below 5%: often considered thin for a leveraged rental, though may still be acceptable in low-risk, high-appreciation markets.
- 5–10%: a commonly cited target range for many buy-and-hold rental investors.
- 10%+: attractive on paper, but often correlates with higher risk, more management intensity, or a less competitive local market.
Because this metric depends heavily on your specific financing, compare it against your own required return and risk tolerance, not just these general ranges.
Is This Rental Property a Good Investment? → · See Our Cash Flow Methodology →
Frequently Asked Questions
How is cash-on-cash return different from cap rate?
Cap rate measures a property's operating performance relative to its value, ignoring financing. Cash-on-cash return measures your annual net cash flow relative to the actual cash you invested — down payment, closing costs, repairs — so it reflects your specific financing and out-of-pocket investment.
Why does a smaller down payment sometimes show a higher cash-on-cash return?
A smaller down payment means less cash invested, which can increase the percentage return even if the dollar amount of cash flow is lower or the monthly payment is higher (since the loan is larger). This is the effect of leverage — it doesn't mean a smaller down payment is automatically the better choice; it changes your risk and monthly cash flow too.
What if my cash-on-cash return is negative?
A negative return means the property is not currently producing positive net cash flow given your assumptions. This calculator does not include appreciation, tax effects, principal paydown, or future rent changes, so a negative near-term return doesn't necessarily mean the investment has no merit — it's one data point among several.
Does cash-on-cash return account for taxes or appreciation?
No. It is a cash-flow-only metric based on the assumptions you enter. It does not capture appreciation, depreciation, tax deductions, principal paydown, or eventual selling costs.
What counts as "total cash invested"?
In this calculator: down payment, closing costs, initial repairs or renovation, and any other initial cash you put toward acquiring and preparing the property — not the full purchase price.
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Educational Use Only: Reaixo provides estimates and scenario calculations for informational and educational purposes. Reaixo is not acting as a real-estate broker, appraiser, lender, contractor, financial advisor, accountant, tax advisor, or investment advisor. ARV, repair costs, financing costs, selling expenses, rents and investment performance can vary materially. The 70% rule is a simplified heuristic and is not appropriate for every property, market, investor, or transaction. Calculator results are not an appraisal, investment recommendation, offer recommendation, or guarantee of profit.