function calculateCoC() {
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPmt = 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;
// 1. Calculate Loan Amount
var loanAmount = Math.max(0, price – downPmt);
// 2. Calculate Monthly Mortgage Payment (Principal & Interest)
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = years * 12;
var mortgagePayment = 0;
if (loanAmount > 0 && monthlyRate > 0 && numberOfPayments > 0) {
mortgagePayment = (loanAmount * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -numberOfPayments));
} else if (loanAmount > 0 && monthlyRate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
}
// 3. Calculate Total Cash Invested
var totalInvested = downPmt + closing + rehab;
// 4. Calculate Monthly Cash Flow
var totalMonthlyOutflow = mortgagePayment + expenses;
var monthlyCashFlow = rent – totalMonthlyOutflow;
// 5. Calculate Annual Cash Flow
var annualCashFlow = monthlyCashFlow * 12;
// 6. Calculate Cash on Cash Return
var cocReturn = 0;
if (totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
// Update UI
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
document.getElementById('resultInvested').innerHTML = formatter.format(totalInvested);
document.getElementById('resultMortgage').innerHTML = formatter.format(mortgagePayment);
document.getElementById('resultMonthlyCash').innerHTML = formatter.format(monthlyCashFlow);
document.getElementById('resultAnnualCash').innerHTML = formatter.format(annualCashFlow);
var cocElement = document.getElementById('resultCoC');
cocElement.innerHTML = cocReturn.toFixed(2) + "%";
// Dynamic styling for negative/positive return
if (cocReturn < 0) {
cocElement.style.color = "#e74c3c";
} else {
cocElement.style.color = "#16a085";
}
document.getElementById('resultsSection').style.display = 'block';
}
Understanding Cash on Cash Return for Real Estate Investors
For any rental property investor, understanding the profitability of an asset is crucial before signing on the dotted line. The Cash on Cash (CoC) Return is one of the most popular metrics used to evaluate the performance of real estate investments. Unlike Cap Rate, which looks at the property's unleveraged yield, Cash on Cash Return focuses specifically on the return on the actual cash you have invested.
The Formula:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100%
Why Use This Calculator?
Real estate deals often involve complex financing structures. Simply subtracting expenses from rent doesn't give you the full picture of your efficiency. This calculator helps you determine:
Leverage Efficiency: How well your mortgage leverage is working for you.
True Liquidity: How much actual cash ends up in your pocket annually relative to what you put in.
Deal Comparison: A standardized percentage to compare a rental property against other investments like stocks or bonds.
Input Breakdown
To get the most accurate result from the calculator above, ensure you include all relevant costs:
Down Payment & Loan Details: These determine your mortgage payment, which is your largest monthly liability.
Closing Costs & Rehab: Many investors forget to include these in the "Total Cash Invested," leading to artificially inflated return numbers. Always include title fees, inspections, and immediate repair costs.
Monthly Expenses: Beyond just the mortgage, remember to account for property taxes, insurance, HOA fees, property management (even if self-managing, account for your time), vacancy reserves, and maintenance.
What is a Good Cash on Cash Return?
While "good" is subjective, most real estate investors target a CoC return between 8% and 12%. In highly competitive markets, investors might accept 5-7% anticipating appreciation, while in riskier or lower-cost markets, investors may demand upwards of 15%.
Example Scenario:
You buy a property for $200,000. You put $40,000 down and spend $10,000 on closing and repairs (Total Invested: $50,000). After paying the mortgage and all expenses, the property generates $4,000 in positive cash flow per year. Calculation: $4,000 / $50,000 = 0.08 or 8% Return.
Use the calculator above to run scenarios on potential deals to ensure they meet your investment criteria before making an offer.