Rental Property Cash on Cash Return Calculator
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Investment Analysis
Cash on Cash Return
0.00%
Monthly Cash Flow
$0.00
Annual Cash Flow
$0.00
Total Cash Invested
$0.00
Monthly Mortgage Payment
$0.00
Cap Rate
0.00%
Understanding Your Rental Property ROI
Investing in real estate is one of the most reliable ways to build wealth, but not every property is a good deal. To ensure profitability, investors must look beyond the purchase price and analyze the returns relative to the cash invested. This Rental Property Cash on Cash Return Calculator helps you evaluate the efficiency of your investment money.
What is Cash on Cash Return?
Cash on Cash (CoC) Return is a metric used in real estate transactions to calculate the cash income earned on the cash invested in a property. Unlike standard Return on Investment (ROI) which might consider total debt, CoC strictly measures the return on the actual dollars you put into the deal (down payment, closing costs, and renovations) relative to the pre-tax cash flow.
The formula is:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
How to Use This Calculator
To get an accurate analysis of your potential rental property, you will need to input specific financial details:
- Purchase Price: The agreed-upon price to buy the property.
- Down Payment & Closing Costs: The upfront capital required to secure the property.
- Rehab Costs: Any immediate repairs or renovations needed to make the property rentable.
- Loan Details: Your interest rate and loan term determine your monthly debt service.
- Operating Expenses: Costs such as property taxes, insurance, property management fees, maintenance reserves, and vacancy allowances.
What is a Good Cash on Cash Return?
What constitutes a "good" return varies by market and investor strategy, but generally:
- 8% – 12%: Often considered a solid return for safe, residential rental properties in stable markets.
- 15%+: Considered an excellent return, often found in riskier markets or properties requiring significant "sweat equity" (rehab work).
- Below 5%: Might not be worth the effort compared to passive index fund investing, unless the property has high appreciation potential.
Cash Flow vs. Appreciation
This calculator focuses on Cash Flow. However, real estate investors also profit from Appreciation (the property increasing in value over time) and Loan Paydown (tenants paying off your principal). A property with a lower Cash on Cash return might still be a great investment if it is located in a high-growth area where property values are skyrocketing.
Calculating Cap Rate vs. Cash on Cash
You will notice our calculator also outputs the Cap Rate (Capitalization Rate). The Cap Rate measures the property's natural rate of return assuming you paid all cash (no mortgage). It helps compare the quality of the property itself, whereas Cash on Cash return measures the quality of your specific financial setup (leverage).
function calculateROI() {
// Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var rehabCosts = parseFloat(document.getElementById('rehabCosts').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var monthlyExpenses = parseFloat(document.getElementById('monthlyExpenses').value) || 0;
// 1. Calculate Loan Amount
var loanAmount = purchasePrice – downPayment;
if (loanAmount 0 && interestRate > 0 && loanTerm > 0) {
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0 && loanTerm > 0) {
monthlyMortgage = loanAmount / (loanTerm * 12);
}
// 3. Calculate Cash Flow
var totalMonthlyOutflow = monthlyMortgage + monthlyExpenses;
var monthlyCashFlow = monthlyRent – totalMonthlyOutflow;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate Total Cash Invested
var totalInvested = downPayment + closingCosts + rehabCosts;
// 5. Calculate Cash on Cash Return
var cocReturn = 0;
if (totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
// 6. Calculate Cap Rate (NOI / Purchase Price)
// NOI = Annual Rent – Annual Operating Expenses (excludes mortgage)
var annualNOI = (monthlyRent * 12) – (monthlyExpenses * 12);
var capRate = 0;
if (purchasePrice > 0) {
capRate = (annualNOI / purchasePrice) * 100;
}
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
// Update UI
document.getElementById('cocReturnResult').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('monthlyCashFlowResult').innerText = formatter.format(monthlyCashFlow);
document.getElementById('annualCashFlowResult').innerText = formatter.format(annualCashFlow);
document.getElementById('totalInvestedResult').innerText = formatter.format(totalInvested);
document.getElementById('mortgagePaymentResult').innerText = formatter.format(monthlyMortgage);
document.getElementById('capRateResult').innerText = capRate.toFixed(2) + "%";
// Color coding for negative flow
if (monthlyCashFlow < 0) {
document.getElementById('monthlyCashFlowResult').style.color = "#c0392b";
document.getElementById('annualCashFlowResult').style.color = "#c0392b";
} else {
document.getElementById('monthlyCashFlowResult').style.color = "#2c3e50";
document.getElementById('annualCashFlowResult').style.color = "#2c3e50";
}
}
// Initialize on load
calculateROI();