Cash-on-Cash Return Calculator
Calculate cash-on-cash return for leveraged real estate investments
About this calculator
The Cash-on-Cash Return Calculator helps real estate investors evaluate the profitability of leveraged property investments by measuring annual pre-tax cash flow against the initial cash investment. This metric is essential for comparing different investment opportunities and determining whether a property generates adequate returns relative to the actual cash invested. Unlike other return metrics, cash-on-cash return focuses specifically on the cash you put into the deal versus the cash flow you receive, making it particularly valuable for leveraged real estate investments where financing is involved.
How to use
Enter your total initial cash investment including down payment, closing costs, and any immediate repairs or improvements. Then input your annual pre-tax cash flow, which is your net rental income minus all operating expenses and debt service payments. The calculator will instantly compute your cash-on-cash return percentage, showing how much annual return you're earning on your actual cash invested.
Frequently asked questions
What is a good cash-on-cash return for real estate?
Generally, 8-12% is considered good, though it varies by market conditions, property type, and risk level. Higher returns often indicate higher risk investments.
How is cash-on-cash return different from ROI?
Cash-on-cash return measures cash flow against cash invested, while ROI considers total return including appreciation against total investment including borrowed money.
Should I include property appreciation in this calculation?
No, cash-on-cash return only measures annual cash flow returns. It doesn't include property appreciation, tax benefits, or principal paydown from tenants.