Rental Property Cash on Cash Return Calculator
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Cash on Cash Return
0.00%
| Total Cash Invested |
$0 |
| Monthly Cash Flow |
$0 |
| Annual Cash Flow |
$0 |
| Annual Gross Income |
$0 |
| Annual Expenses |
$0 |
Understanding Cash on Cash Return
Cash on Cash Return (CoC) is one of the most important metrics in real estate investing. Unlike standard Return on Investment (ROI), which might factor in loan paydown or appreciation, CoC measures the annual cash income earned on the property specifically in relation to the amount of cash you actually put into the deal.
This metric effectively answers the question: "For every dollar I invested from my savings, how many cents am I getting back this year?"
How the Formula Works
The formula for calculating Cash on Cash Return is relatively straightforward:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
There are two main components to this calculation:
- Annual Cash Flow: This is your Gross Rental Income minus all expenses (Mortgage, Taxes, Insurance, HOA, Repairs, Vacancy, Property Management). It is the net profit you put in your pocket at the end of the year.
- Total Cash Invested: This is the sum of all out-of-pocket costs to acquire the property. It includes your Down Payment, Closing Costs, and initial Rehab/Renovation costs.
Real-World Example
Let's look at the numbers used as defaults in the calculator above:
- You buy a property for $200,000.
- You put 25% down ($50,000) and pay $6,000 in closing costs, plus $4,000 in immediate repairs. Your Total Cash Invested is $60,000.
- Your tenants pay $2,200/month in rent.
- Your expenses (mortgage, taxes, insurance, maintenance) total $1,600/month.
- Your Monthly Cash Flow is $600 ($2,200 – $1,600).
- Your Annual Cash Flow is $7,200 ($600 × 12).
To find the return: ($7,200 / $60,000) = 0.12, or 12% Cash on Cash Return.
What is a "Good" Cash on Cash Return?
While target returns vary by investor and market, general benchmarks include:
- 8-12%: Generally considered a solid return for most buy-and-hold residential investments.
- 15%+: Considered excellent, though often requires finding undervalued properties or doing significant renovation work (BRRRR strategy).
- Under 5%: Often considered poor for pure cash flow investing, unless the property is in a high-appreciation market (like San Francisco or NYC).
Why Use This Calculator?
Experienced investors use this Cash on Cash Return calculator to quickly screen properties. It helps filter out bad deals before you spend time on deeper analysis. If a property shows negative or very low CoC return, it implies you are locking up your cash for very little immediate benefit, making it a risky proposition unless you are banking purely on speculative appreciation.
function calculateCoC() {
// 1. Get Input Values
var purchasePrice = parseFloat(document.getElementById('coc_purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('coc_downPayment').value) || 0;
var closingCosts = parseFloat(document.getElementById('coc_closingCosts').value) || 0;
var rehabCosts = parseFloat(document.getElementById('coc_rehabCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('coc_monthlyRent').value) || 0;
var mortgage = parseFloat(document.getElementById('coc_mortgage').value) || 0;
var taxes = parseFloat(document.getElementById('coc_taxes').value) || 0;
var insurance = parseFloat(document.getElementById('coc_insurance').value) || 0;
var otherExp = parseFloat(document.getElementById('coc_otherExp').value) || 0;
// 2. Calculate Investment Totals (The Denominator)
var totalInvested = downPayment + closingCosts + rehabCosts;
// 3. Calculate Income & Expenses (The Numerator components)
var monthlyIncome = monthlyRent;
var monthlyExpenses = mortgage + taxes + insurance + otherExp;
var monthlyCashFlow = monthlyIncome – monthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate CoC
var cocReturn = 0;
if (totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
// 5. Formatting Helpers
var currencyFormat = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
// 6. Display Results
var cocElement = document.getElementById('result_coc');
cocElement.innerText = cocReturn.toFixed(2) + "%";
// Dynamic styling for positive/negative flow
if (cocReturn >= 0) {
cocElement.style.color = "#27ae60";
} else {
cocElement.style.color = "#c0392b";
}
document.getElementById('result_totalInvested').innerText = currencyFormat.format(totalInvested);
document.getElementById('result_monthlyCashFlow').innerText = currencyFormat.format(monthlyCashFlow);
document.getElementById('result_annualCashFlow').innerText = currencyFormat.format(annualCashFlow);
document.getElementById('result_annualIncome').innerText = currencyFormat.format(monthlyIncome * 12);
document.getElementById('result_annualExpenses').innerText = currencyFormat.format(monthlyExpenses * 12);
// Verdict Logic
var verdictText = "";
if (totalInvested === 0) {
verdictText = "Enter investment costs.";
} else if (cocReturn < 0) {
verdictText = "Negative Cash Flow";
} else if (cocReturn < 5) {
verdictText = "Low Return";
} else if (cocReturn < 12) {
verdictText = "Solid Return";
} else {
verdictText = "Excellent Return";
}
document.getElementById('result_verdict').innerText = verdictText;
}
// Run calculation on load to show default values
window.onload = function() {
calculateCoC();
};