Estimate your ROI based on income, expenses, and financing.
$
$
$
$
%
Yrs
$
$
(Taxes, Insurance, HOA, Vacancy, Repairs)
Total Cash Invested:$0.00
Monthly Mortgage Payment (P&I):$0.00
Monthly Cash Flow:$0.00
Annual Cash Flow:$0.00
Cash on Cash Return:0.00%
function calculateROI() {
// 1. Get Inputs
var price = parseFloat(document.getElementById("propPrice").value) || 0;
var down = parseFloat(document.getElementById("downPayment").value) || 0;
var closing = parseFloat(document.getElementById("closingCosts").value) || 0;
var rehab = parseFloat(document.getElementById("rehabCosts").value) || 0;
var rate = parseFloat(document.getElementById("interestRate").value) || 0;
var years = parseFloat(document.getElementById("loanTerm").value) || 0;
var rent = parseFloat(document.getElementById("monthlyRent").value) || 0;
var expenses = parseFloat(document.getElementById("monthlyExpenses").value) || 0;
// 2. Logic for Investment Base
var totalCashInvested = down + closing + rehab;
var loanAmount = price – down;
// 3. Logic for Mortgage (P&I)
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = years * 12;
var mortgagePayment = 0;
if (loanAmount > 0 && rate > 0 && years > 0) {
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && rate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
}
// 4. Logic for Cash Flow
var totalMonthlyExpenses = mortgagePayment + expenses;
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Logic for Cash on Cash Return
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// 6. Update UI
document.getElementById("resTotalInvested").innerText = formatCurrency(totalCashInvested);
document.getElementById("resMortgage").innerText = formatCurrency(mortgagePayment);
document.getElementById("resMonthlyCashFlow").innerText = formatCurrency(monthlyCashFlow);
document.getElementById("resAnnualCashFlow").innerText = formatCurrency(annualCashFlow);
var cocElement = document.getElementById("resCoC");
cocElement.innerText = cocReturn.toFixed(2) + "%";
// Color coding for negative/positive
if (cocReturn < 0) {
cocElement.style.color = "#c0392b";
} else {
cocElement.style.color = "#27ae60";
}
// Show results container
document.getElementById("roiResults").style.display = "block";
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Understanding Cash on Cash Return in Real Estate
When investing in rental properties, understanding your Return on Investment (ROI) is crucial for making informed decisions. While there are many metrics to evaluate a property (like Cap Rate or IRR), Cash on Cash Return (CoC) is one of the most practical metrics for investors who use financing.
What is Cash on Cash Return?
Cash on Cash Return measures the annual pre-tax cash flow generated by the property in relation to the actual amount of cash you invested to acquire it. Unlike Cap Rate, which looks at the property's potential regardless of debt, CoC specifically accounts for your financing leverage.
It answers the simple question: "For every dollar I put into this deal, how many dollars am I getting back this year?"
The Formula
The calculation used in the tool above follows this standard formula:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
Annual Cash Flow: This is your Gross Rent minus all operating expenses (taxes, insurance, HOA, repairs, vacancy) and minus your mortgage debt service.
Total Cash Invested: This includes your Down Payment, Closing Costs, and any immediate Rehab/Repair costs required to get the property rentable.
Why is a "Good" CoC Return?
There is no single rule for a "good" return, as it depends on your risk tolerance and the local market. However, general investor guidelines suggest:
8-12%: Generally considered a solid return for residential rental properties.
15%+: Considered an excellent return, often found in lower-cost markets or properties requiring significant work (BRRRR strategy).
Under 5%: Might be acceptable in high-appreciation markets (like coastal cities) where the primary goal is long-term equity growth rather than immediate cash flow.
Example Scenario
Let's say you buy a property for $200,000.
You put 20% down ($40,000).
Closing costs are $5,000.
You spend $5,000 on repairs.
Total Cash Invested: $50,000.
After paying the mortgage and all expenses, the property generates $400 per month in pure profit (cash flow).
Annual Cash Flow = $4,800.
CoC Return = $4,800 / $50,000 = 9.6%.
How to Improve Your Returns
If the calculator shows a return lower than your goal, consider these strategies:
Negotiate Price: A lower purchase price reduces your loan amount and mortgage payment.
Increase Rent: Can you add value (like new appliances or fresh paint) to justify higher rent?
Reduce Expenses: Shop around for cheaper insurance or manage the property yourself to save on management fees.