Cash-on-Cash Return Calculator
Calculate property cash-on-cash return from annual pre-tax cash flow and total upfront cash invested.
Calculate cash-on-cash return
Compare annual pre-tax property cash flow with the total cash invested in the deal.
How the Cash-on-Cash Return Calculator works
Cash-on-cash return measures annual pre-tax cash flow relative to the actual cash invested by the investor. The calculator sums down payment, closing costs and upfront rehab/setup cash, then divides annual cash flow by that total. This makes it different from cap rate, which ignores the financing structure.
How to use this cash-on-cash return calculator
Enter the annual cash flow remaining after property operating expenses and debt service but before income tax, using the convention appropriate to your underwriting. Then enter all significant cash contributed at acquisition. If a lender finances renovation or closing costs, include only the cash portion paid by the investor.
How to interpret the result
A positive cash-on-cash percentage shows current-period cash yield on invested equity. The simple payback figure indicates how many years of identical cash flow would recover the initial cash contribution, but it should not be mistaken for an IRR or discounted payback because it ignores timing and future sale proceeds.
Assumptions and limitations
The metric excludes appreciation, loan principal reduction, refinance proceeds, depreciation tax effects and the changing value of money. It is highly sensitive to what is included in “cash flow” and “cash invested.” Compare deals only when those definitions are consistent and verify financing/expense assumptions independently.
Practical example and workflow
If annual pre-tax cash flow is 240,000 and total cash invested is 1.75 million after down payment, closing and rehab, cash-on-cash return is about 13.7%. An investor can compare that current cash yield with alternative financing structures while separately modelling long-term equity growth.