- Home
- Deal calculators
- Cash-on-cash return calculator
Cash-on-cash return calculator
How much your own money earns each year: cash flow after the mortgage, divided by the down payment, closing costs and repairs you paid.
Cash-on-cash return
0 %
$0 a year of cash flow on $0 of your own money.
| Down payment | $0 |
|---|---|
| Closing costs and repairs | $0 |
| Total cash invested | $0 |
| Net operating income | $0 |
| Mortgage payments ($0/mo) | $0 |
| Yearly cash flow | $0 |
Year one, before income tax. Cash-on-cash leaves out loan principal paid down and appreciation, which also add to your return over time.
The formula
Cash-on-cash return = Yearly pre-tax cash flow / Total cash invested
A step-by-step example and what moves the number are in what is cash-on-cash return.
Why leverage changes it so much
With a loan you put in less cash, so each dollar of cash flow is a bigger share of it. That works only while the property yields more than the loan costs. When the interest rate is above the cap rate, a bigger loan lowers cash-on-cash instead of raising it. Try 25 % and 40 % down in the calculator to see which side of that line a deal is on.
Questions
How do you calculate cash-on-cash return?
Divide the yearly pre-tax cash flow by the total cash you put in. Cash flow is rent collected minus operating expenses minus mortgage payments. Cash in is the down payment plus closing costs plus repairs paid at the start.
What is a good cash-on-cash return?
Many investors look for something between 6 % and 10 % on a long-term rental, but the right number depends on how much risk and work you accept and what else your money could earn. Compare it with a safe alternative such as a savings account or Treasury bills.
Is cash-on-cash the same as ROI?
No. Cash-on-cash counts only the cash flow you receive. A full return on investment also counts loan principal paid down, appreciation and tax effects, which you only collect when you sell or refinance.
Do I include closing costs?
Yes. Any cash you had to put in to own and rent the property counts: down payment, lender and title fees, inspections, and repairs or furnishing before the first tenant.
Next steps
Last updated November 5, 2026.