Rental Property Cash on Cash Return Calculator
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margin: 0 auto;
padding: 20px;
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border: 1px solid #e0e0e0;
border-radius: 8px;
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.rp-calc-header {
text-align: center;
margin-bottom: 25px;
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.rp-calc-header h2 {
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transition: background 0.3s;
width: 100%;
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Investment Analysis
Cash on Cash Return
0.00%
Monthly Cash Flow
0.00
Cap Rate
0.00%
Total Cash Needed
0.00
Monthly NOI
0.00
Mortgage Payment (P&I)
0.00
function calculateRental() {
// Retrieve inputs
var price = parseFloat(document.getElementById('rp_price').value) || 0;
var closingCosts = parseFloat(document.getElementById('rp_closing_costs').value) || 0;
var rehabCosts = parseFloat(document.getElementById('rp_rehab').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('rp_down_payment').value) || 0;
var interestRate = parseFloat(document.getElementById('rp_rate').value) || 0;
var loanTermYears = parseFloat(document.getElementById('rp_term').value) || 0;
var monthlyRent = parseFloat(document.getElementById('rp_rent').value) || 0;
var otherIncome = parseFloat(document.getElementById('rp_other_income').value) || 0;
var annualTax = parseFloat(document.getElementById('rp_tax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('rp_insurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('rp_hoa').value) || 0;
var maintenancePercent = parseFloat(document.getElementById('rp_capex').value) || 0;
// Calculations – Financing
var downPaymentAmount = price * (downPaymentPercent / 100);
var loanAmount = price – downPaymentAmount;
var totalCashNeeded = downPaymentAmount + closingCosts + rehabCosts;
// Mortgage Calculation (P&I)
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTermYears * 12;
var mortgagePayment = 0;
if (monthlyRate > 0 && totalPayments > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else if (loanTermYears > 0) {
mortgagePayment = loanAmount / totalPayments;
}
// Calculations – Income & Expenses
var totalMonthlyIncome = monthlyRent + otherIncome;
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyMaintenance = totalMonthlyIncome * (maintenancePercent / 100);
var totalMonthlyExpenses = mortgagePayment + monthlyTax + monthlyInsurance + monthlyHOA + monthlyMaintenance;
var monthlyCashFlow = totalMonthlyIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Calculations – Metrics
var monthlyOperatingExpenses = monthlyTax + monthlyInsurance + monthlyHOA + monthlyMaintenance; // Excluding Mortgage
var monthlyNOI = totalMonthlyIncome – monthlyOperatingExpenses;
var annualNOI = monthlyNOI * 12;
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
var cashOnCash = 0;
if (totalCashNeeded > 0) {
cashOnCash = (annualCashFlow / totalCashNeeded) * 100;
}
// Update UI
document.getElementById('res_coc').innerText = cashOnCash.toFixed(2) + '%';
document.getElementById('res_monthly_cash').innerText = '$' + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_cap_rate').innerText = capRate.toFixed(2) + '%';
document.getElementById('res_cash_needed').innerText = '$' + totalCashNeeded.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_noi').innerText = '$' + monthlyNOI.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_mortgage').innerText = '$' + mortgagePayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show results
document.getElementById('rpResults').style.display = 'block';
}
Understanding Cash on Cash Return in Real Estate
When investing in rental properties, it is crucial to move beyond simple revenue numbers and understand the true efficiency of your capital. The Cash on Cash Return metric is one of the most important tools for real estate investors. It measures the annual return the investor made on the property in relation to the amount of mortgage paid during the same year.
How is Cash on Cash Return Calculated?
The formula for Cash on Cash Return is relatively straightforward but requires accurate data regarding your income and expenses:
- Annual Pre-Tax Cash Flow: This is your total rental income minus all operating expenses (taxes, insurance, HOA, maintenance) and debt service (mortgage payments).
- Total Cash Invested: This includes your down payment, closing costs, and any immediate rehab or renovation costs required to get the property rent-ready.
Unlike the Cap Rate, which assesses the property's potential regardless of financing, Cash on Cash Return specifically accounts for the leverage (loans) used to purchase the asset, making it a "real world" metric for your bank account.
Cap Rate vs. Cash on Cash Return
While both metrics track profitability, they serve different purposes:
- Cap Rate (Capitalization Rate): Measures the property's natural rate of return without financing. It equals Net Operating Income (NOI) divided by the Purchase Price. It is useful for comparing the quality of the property itself.
- Cash on Cash Return: Measures the return on your actual cash investment. It is highly sensitive to your financing terms. A property with a low Cap Rate can still have a high Cash on Cash return if leveraged correctly with a low interest rate and small down payment.
What is a Good Cash on Cash Return?
There is no one-size-fits-all answer, as "good" returns vary by market and investor strategy. However, many investors follow these general benchmarks:
- 8% – 12%: Generally considered a solid return for long-term buy-and-hold investments in stable markets.
- 15%+: Often found in riskier markets or properties requiring significant "sweat equity" (rehab work).
- Below 5%: Might be acceptable in high-appreciation markets (like parts of California or New York) where the primary goal is future equity rather than immediate cash flow.
Factors That Kill Profitability
Using this calculator, pay close attention to the Maintenance/Vacancy and HOA fields. Beginners often underestimate maintenance costs (recommending budgeting 10-15% of rent) or forget to account for vacancy periods. A high HOA fee can also quickly turn a positive cash flow property into a liability.
Use the calculator above to adjust your down payment and interest rate scenarios to find the "sweet spot" where your capital works most efficiently for your financial goals.