Cash-on-cash return calculator
Yearly pre-tax cash flow on a financed rental divided by the cash you put in.
- ๐บ๐ธ US federal & state rules
Cash-on-cash return
2.42%
$2,177 a year ($181.40 a month) on $90,000 invested
- Yearly cash flow
- $2,177
- Cash invested
- $90,000
- Cap rate
- 6.71%
- DSCR
- 1.12
This is an example. Enter your numbers above and press the button to see your own result.
Yearly numbers
| Net operating income | $20,140 |
|---|---|
| Mortgage payments | $17,963 ($1,496.93 a month on $225,000) |
| Cash flow before tax | $2,177 |
- Before income tax. Principal paydown and appreciation are not counted, so total return is usually higher than this number.
- Operating expenses should include property tax, insurance, repairs, management and any HOA. Leave the mortgage out; it is added separately.
Show the math
| Cash invested | $75,000 + $9,000 + $6,000 = $90,000 |
|---|---|
| Cash flow | $20,140 NOI โ $17,963 debt service = $2,177 |
| Cash-on-cash | $2,177 รท $90,000 = 2.42% |
What to do next
How it works
Net operating income is yearly rent after vacancy minus operating expenses. Subtract 12 months of mortgage payments to get pre-tax cash flow. Cash-on-cash return is that cash flow divided by down payment, closing costs and repairs.
Things to keep in mind
This is a first-year number. It leaves out loan principal you pay down, appreciation, depreciation and income tax, all of which change your total return.
Frequently asked questions
How is cash-on-cash return calculated?
Divide yearly pre-tax cash flow by the total cash you put in. $3,000 of cash flow on $90,000 invested is 3.33%.
What counts as cash invested?
Down payment, closing costs and any repairs paid before the property earns rent. Loan money does not count.
Why is my cash-on-cash return lower than the cap rate?
When the loan rate is higher than the cap rate, borrowing pulls the return on your cash down. That is called negative leverage.