Cash on Cash Return Calculator
Work out the cash on cash return on a rental property. Enter your annual or monthly pre-tax cash flow and the total cash you put in to see the return on your actual money invested.
How to calculate cash on cash return
- Enter your annual pre-tax cash flow, or switch to monthly and enter the monthly figure.
- Enter the total cash invested: down payment, closing costs and any rehab.
- Read the cash on cash return as a percent.
Examples
12,000 of cash flow on 100,000 invested
Annual cash flow 12,000, total cash invested 100,000
Cash on cash return 12 percent
Frequently asked questions
What is cash on cash return?
Cash on cash return is the annual pre-tax cash flow from a property divided by the total cash you invested, shown as a percent. It measures the return on the actual money you put in, not the full property price.
How is cash on cash return calculated?
Divide the annual pre-tax cash flow by the total cash invested and multiply by 100. For example, 12,000 of yearly cash flow on 100,000 invested is a 12 percent cash on cash return.
What counts as total cash invested?
It is the out-of-pocket cash you put into the deal: the down payment, closing costs, loan fees and any upfront repairs or rehab. It does not include the financed portion of the purchase price.
How is cash on cash return different from cap rate?
Cap rate divides net operating income by the property value and ignores financing. Cash on cash return divides leveraged cash flow by the cash you actually invested, so it reflects the effect of your mortgage.
Is a higher cash on cash return always better?
A higher return means more annual cash flow per dollar invested, which is generally good. But very high returns can come with more leverage or risk, so weigh it against the loan terms and the property quality.
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