Use this cash-on-cash return calculator to see the annual pre-tax return on the cash you actually invest in a rental — down payment, closing costs, and rehab — after the loan payment. Adjust price, leverage, rent, and expenses to compare deals before you write an offer.
Cash-on-cash return calculator
Model annual pre-tax cash flow against the cash you actually invest. Results are estimates — not a loan offer.
Monthly cash flow
—
Annual cash flow
—
Total cash invested
—
Cash-on-cash return
—
What cash-on-cash return measures
Cash-on-cash return answers one question: for every dollar of your own cash tied up in a deal, how much pre-tax cash flow comes back each year? It divides annual cash flow after debt service by the total cash you invested. Because it works off the money out of your pocket — not the full purchase price — it is the number investors use to compare a leveraged rental against other places they could park capital.
It differs from two metrics investors often confuse it with. Cap rate is NOI divided by purchase price; it ignores financing entirely and describes the property. DSCR (debt service coverage ratio) is NOI divided by the loan payment; it tells a lender whether rent covers debt. Cash-on-cash sits downstream of both — it takes cash flow after the loan payment and measures it against your capital, so it moves with your down payment, rate, and closing costs. See the cash-on-cash glossary entry and cap rate entry for quick definitions.
The cash-on-cash formula
Cash-on-cash return = Annual pre-tax cash flow ÷ Total cash invested
Build each side the way the calculator does:
- Effective gross rent = gross monthly rent × (1 − vacancy %)
- Monthly cash flow = effective gross rent − operating expenses − monthly debt payment
- Annual cash flow = monthly cash flow × 12
- Cash invested = down payment + closing costs + rehab budget
Operating expenses here bundle taxes, insurance, maintenance, and management. The monthly debt payment is principal and interest on a fully amortizing loan, or interest-only carry on a bridge / IO program — toggle the term to see how much the amortizing payment tightens your return.
Worked example: $250,000 rental at 25% down
| Line item | Amount |
|---|---|
| Purchase price | $250,000 |
| Down payment (25%) | $62,500 |
| Loan amount | $187,500 |
| Gross rent − 5% vacancy | $1,995 / mo |
| Operating expenses | −$600 / mo |
| P&I on $187,500 @ 7.75%, 30yr | −$1,343 / mo |
| Monthly cash flow | ≈ $52 / mo |
| Annual cash flow | ≈ $621 |
| Cash invested ($62,500 + $7,500 closing + $0 rehab) | $70,000 |
| Cash-on-cash return | ≈ 0.9% — thin; raise rent, buy better, or restructure debt |
A sub-1% cash-on-cash at today's rates is a common reality check: at 7.75% on 75% leverage, a modest rent leaves almost nothing after the payment. Investors respond by negotiating price, boosting rent, trimming expenses, or putting more cash in to shrink the loan.
How financing (leverage) changes the return
Leverage cuts both ways. Borrowing shrinks the cash invested in the denominator, which can lift cash-on-cash — but only when rent comfortably clears the loan payment. When the payment is tight, the smaller cash flow in the numerator falls faster than the denominator, and cash-on-cash drops below what an all-cash buyer would earn. That crossover is exactly why the same property can look great on one rate-and-term and mediocre on another. Model the permanent refinance payment, not just bridge carry, before you commit — the same discipline our DSCR calculator enforces on the lender's side.
What counts as a "good" cash-on-cash return
There is no universal threshold — a "good" cash-on-cash return depends on your market and strategy. Buy-and-hold investors in cash-flow metros often target roughly 6%–10% on stabilized rentals; appreciation-heavy coastal markets may accept lower cash yield in exchange for equity growth, while value-add and short-term-rental plays underwrite higher to compensate for risk and turnover. Because cash-on-cash is pre-tax and ignores appreciation and principal paydown, a leveraged rental's total return is usually higher than the cash-on-cash number alone. Read it alongside DSCR and cap rate rather than in isolation — start with the DSCR glossary and the DSCR loan requirements guide for the full picture, and explore program options on our DSCR loans hub.
Not sure which loan fits your deal? · (833) 264-7776
Calculator outputs are educational estimates only. Rates, terms and conditions are offered only to qualified borrowers and are subject to change without notice. All loans are subject to full underwriting. Jaken Finance Group only finances non-owner occupied investment properties.