Rental Property Cash-on-Cash Return Calculator
Investment Analysis
Total Initial Cash Invested:
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Monthly Mortgage Payment (P&I):
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Monthly Cash Flow:
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Annual Cash Flow:
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Cash on Cash Return (CoC):
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Understanding Cash-on-Cash Return in Real Estate
Whether you are a seasoned real estate investor or buying your first rental property, analyzing the deal correctly is crucial for long-term wealth building. This Rental Property Cash-on-Cash Return Calculator helps you determine the annual return you earned on the cash you actually invested, rather than the total value of the property.
What is Cash-on-Cash Return?
Cash-on-Cash (CoC) return is a metric used to calculate the cash income earned on the cash invested in a property. Unlike ROI (Return on Investment) which might factor in debt paydown or appreciation, CoC focuses strictly on the liquid cash flow relative to your out-of-pocket costs.
The formula is:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100%
How to Use This Calculator
- Purchase Price: The agreed-upon price of the property.
- Down Payment: The cash amount you pay upfront (excluding the loan).
- Closing/Rehab Costs: Any fees, inspections, or immediate repairs paid in cash to get the property rent-ready.
- Monthly Rent: The total gross income the property generates.
- Monthly Expenses: Include property taxes, insurance, HOA fees, maintenance reserves, and vacancy allowances.
Real-World Example
Imagine you buy a rental home for $200,000. You put $40,000 (20%) down and pay $5,000 in closing costs. Your total cash invested is $45,000.
If the property rents for $1,800/month, and your mortgage plus all expenses total $1,400/month, your positive cash flow is $400/month or $4,800/year.
Result: $4,800 (Annual Cash Flow) ÷ $45,000 (Total Cash Invested) = 10.66% Cash-on-Cash Return.