Cash on Cash Return Calculator
Investment Details
About Cash on Cash Return Calculator
What Is Cash on Cash Return?
Cash on Cash (CoC) return measures the annual pre-tax cash flow of a rental property relative to the total cash you invested. Unlike cap rate, which ignores financing, cash on cash return accounts for your mortgage and shows the actual return on the money you put in. If you invest $50,000 (down payment plus closing costs) in a property that generates $5,000 in annual cash flow after all expenses and mortgage payments, your cash on cash return is 10%. This is the metric that tells leveraged investors how hard their actual invested dollars are working.
The Cash on Cash Formula
The formula is CoC Return = Annual Pre-Tax Cash Flow / Total Cash Invested x 100. Annual cash flow = Gross rent - Vacancy loss - Operating expenses - Annual mortgage payments. Total cash invested = Down payment + Closing costs + Renovation costs. This gives you a clear picture of your actual dollar-for-dollar return.
How to Use This Calculator
Enter the property price, down payment, closing costs, annual rental income, operating expenses, and mortgage details (rate and term). The calculator computes your monthly cash flow, annual cash flow, and cash on cash return percentage. It helps you quickly evaluate whether an investment property meets your return threshold.
Frequently Asked Questions
What is a good cash on cash return?
Most investors target 8-12% CoC return. Anything above 10% is generally considered good. Below 5% may not justify the effort and risk of property management versus passive index fund investing.
How is CoC different from cap rate?
Cap rate ignores financing and measures property-level return. CoC measures your personal return on invested cash including the effect of leverage. With good leverage, CoC can exceed cap rate significantly.
Does CoC account for appreciation?
No. CoC only measures cash flow return. Property appreciation, principal paydown, and tax benefits are separate returns that add to your total return but are not captured in this metric.
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