Analyze the Cash-on-Cash Return of your real estate investment.
(Taxes, Insurance, HOA, Repairs, Vacancy)
Please enter valid positive numbers for all fields.
Total Cash Invested$0
Monthly Mortgage P&I$0
Monthly Cash Flow$0
Annual Cash Flow$0
Cash-on-Cash Return0.00%
Understanding Cash-on-Cash Return in Real Estate
When investing in rental properties, determining the profitability of a deal is crucial before signing any papers. While metrics like "Cap Rate" measure the property's potential independent of financing, Cash-on-Cash Return (CoC) is the most practical metric for investors using leverage (mortgages).
What is Cash-on-Cash Return?
Cash-on-Cash Return measures the annual pre-tax cash flow divided by the total cash invested. It effectively tells you how hard your actual dollars are working for you. Unlike other ROI calculations, it accounts for the fact that you likely borrowed money to buy the property.
Purchase Price: The agreed-upon sale price of the property.
Down Payment & Closing Costs: These combined form your "Total Cash Invested." This is the denominator in the equation.
Rental Income: The total gross income collected from tenants monthly.
Operating Expenses: These are the costs to run the property, excluding the mortgage. They include Property Taxes, Insurance, Maintenance/Repairs, Property Management fees, HOA fees, and Vacancy reserves.
Mortgage Payment: Calculated based on your loan amount (Price minus Down Payment), interest rate, and term.
Interpreting the Results
A "good" Cash-on-Cash return varies by market and investor strategy, but here are general benchmarks:
8-12%: Generally considered a solid return for long-term rentals in stable markets.
15%+: Excellent returns, often found in riskier markets or through strategies like BRRRR (Buy, Rehab, Rent, Refinance, Repeat).
Negative Return: Means the property costs you money to hold every month. This is usually only acceptable if you are banking on significant property appreciation.
Example Calculation
Imagine you buy a property for $200,000. You put $40,000 down and pay $5,000 in closing costs (Total Investment: $45,000).
After paying the mortgage and all expenses, the property profits $300 per month ($3,600 per year).
Your Cash-on-Cash Return would be: $3,600 / $45,000 = 8%.
function calculateROI() {
// 1. Get DOM elements
var purchasePriceInput = document.getElementById("purchasePrice");
var downPaymentInput = document.getElementById("downPayment");
var closingCostsInput = document.getElementById("closingCosts");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var rentalIncomeInput = document.getElementById("rentalIncome");
var monthlyExpensesInput = document.getElementById("monthlyExpenses");
var errorMsg = document.getElementById("error-message");
var resultsArea = document.getElementById("results-area");
// 2. Parse values
var price = parseFloat(purchasePriceInput.value);
var downPayment = parseFloat(downPaymentInput.value);
var closingCosts = parseFloat(closingCostsInput.value);
var rate = parseFloat(interestRateInput.value);
var term = parseFloat(loanTermInput.value);
var income = parseFloat(rentalIncomeInput.value);
var expenses = parseFloat(monthlyExpensesInput.value);
// 3. Validation
if (isNaN(price) || isNaN(downPayment) || isNaN(closingCosts) ||
isNaN(rate) || isNaN(term) || isNaN(income) || isNaN(expenses) ||
price < 0 || term <= 0) {
errorMsg.style.display = "block";
resultsArea.style.display = "none";
return;
}
errorMsg.style.display = "none";
// 4. Calculations
var loanAmount = price – downPayment;
var totalInvested = downPayment + closingCosts;
// Mortgage Calculation (P * r * (1+r)^n) / ((1+r)^n – 1)
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = term * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
} else {
mortgagePayment = loanAmount *
(monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) /
(Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Handle case if full cash purchase (loanAmount <= 0)
if (loanAmount 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
// 5. Display Results
document.getElementById("displayTotalInvestment").innerHTML = formatCurrency(totalInvested);
document.getElementById("displayMortgage").innerHTML = formatCurrency(mortgagePayment);
var flowEl = document.getElementById("displayMonthlyCashFlow");
flowEl.innerHTML = formatCurrency(monthlyCashFlow);
flowEl.style.color = monthlyCashFlow >= 0 ? "#27ae60" : "#c0392b";
var annualEl = document.getElementById("displayAnnualCashFlow");
annualEl.innerHTML = formatCurrency(annualCashFlow);
annualEl.style.color = annualCashFlow >= 0 ? "#27ae60" : "#c0392b";
var cocEl = document.getElementById("displayCoC");
cocEl.innerHTML = cocReturn.toFixed(2) + "%";
cocEl.style.color = cocReturn >= 0 ? "#2c3e50" : "#c0392b";
resultsArea.style.display = "block";
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}