.calculator-wrapper {
max-width: 800px;
margin: 0 auto;
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
color: #333;
line-height: 1.6;
}
.calc-container {
background: #ffffff;
border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 30px;
box-shadow: 0 4px 12px rgba(0,0,0,0.05);
margin-bottom: 40px;
}
.calc-header {
text-align: center;
margin-bottom: 25px;
}
.calc-header h2 {
margin: 0;
color: #2c3e50;
}
.input-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
}
@media (max-width: 600px) {
.input-grid {
grid-template-columns: 1fr;
}
}
.input-group {
margin-bottom: 15px;
}
.input-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
font-size: 14px;
color: #555;
}
.input-group input {
width: 100%;
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box; /* Important for padding */
}
.section-title {
grid-column: 1 / -1;
font-weight: bold;
color: #2980b9;
margin-top: 10px;
border-bottom: 2px solid #f0f0f0;
padding-bottom: 5px;
margin-bottom: 15px;
}
.calc-btn {
display: block;
width: 100%;
padding: 15px;
background-color: #27ae60;
color: white;
border: none;
border-radius: 6px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
margin-top: 20px;
transition: background 0.3s;
}
.calc-btn:hover {
background-color: #219150;
}
.results-area {
margin-top: 30px;
background: #f8f9fa;
border-radius: 6px;
padding: 20px;
border-left: 5px solid #27ae60;
display: none; /* Hidden by default */
}
.result-row {
display: flex;
justify-content: space-between;
margin-bottom: 10px;
font-size: 15px;
}
.result-row.final {
margin-top: 15px;
padding-top: 15px;
border-top: 1px solid #ddd;
font-weight: bold;
font-size: 20px;
color: #27ae60;
}
.article-content {
padding: 20px;
background: #fff;
}
.article-content h2 {
color: #2c3e50;
border-bottom: 2px solid #27ae60;
padding-bottom: 10px;
margin-top: 30px;
}
.article-content h3 {
color: #34495e;
margin-top: 25px;
}
.article-content ul {
padding-left: 20px;
}
.article-content li {
margin-bottom: 10px;
}
.error-msg {
color: #c0392b;
font-weight: bold;
text-align: center;
margin-top: 10px;
display: none;
}
function calculateCoC() {
// Get Input Values
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 monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
var mortgagePayment = parseFloat(document.getElementById('mortgagePayment').value) || 0;
var monthlyExpenses = parseFloat(document.getElementById('monthlyExpenses').value) || 0;
// Basic Validation to ensure user entered meaningful data
if (downPayment === 0 && rehabCosts === 0 && closingCosts === 0) {
document.getElementById('errorDisplay').style.display = 'block';
document.getElementById('resultsArea').style.display = 'none';
document.getElementById('errorDisplay').innerText = "Please enter at least a Down Payment or Rehab Cost to calculate return on investment.";
return;
}
document.getElementById('errorDisplay').style.display = 'none';
// 1. Calculate Total Cash Invested (The Denominator)
var totalCashInvested = downPayment + closingCosts + rehabCosts;
// 2. Calculate Monthly Net Cash Flow
var totalMonthlyIncome = monthlyRent + otherIncome;
var totalMonthlyOutflow = mortgagePayment + monthlyExpenses;
var monthlyCashFlow = totalMonthlyIncome – totalMonthlyOutflow;
// 3. Calculate Annual Cash Flow (The Numerator)
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate Cash on Cash Return
// Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) * 100
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// Display Results
document.getElementById('resTotalInvested').innerText = "$" + totalCashInvested.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resMonthlyCashFlow').innerText = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resAnnualCashFlow').innerText = "$" + annualCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cocElement = document.getElementById('resCoC');
cocElement.innerText = cocReturn.toFixed(2) + "%";
// Style change for negative returns
if (cocReturn < 0) {
cocElement.style.color = "#c0392b";
} else {
cocElement.style.color = "#27ae60";
}
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Cash on Cash Return in Real Estate
When investing in rental properties, determining the profitability of a deal is paramount. While there are many metrics available—such as Cap Rate, ROI, and IRR—the Cash on Cash (CoC) Return is widely considered the most practical metric for investors utilizing financing (leverage). It specifically measures the return on the actual cash you invested, rather than the total value of the property.
What is the Cash on Cash Return Formula?
The Cash on Cash Return formula is a simple percentage calculation that compares your annual pre-tax cash flow to the total amount of cash you actually put into the deal.
Formula:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100%
To use this calculator effectively, you need to understand the two main components:
- Annual Pre-Tax Cash Flow: This is your Gross Rental Income minus all operating expenses (taxes, insurance, maintenance, management fees) and debt service (mortgage payments). It represents the profit you pocket every year.
- Total Cash Invested: This includes your Down Payment, Closing Costs, and any immediate Repair or Rehab costs required to get the property rentable. It does not include the loan amount.
Example Calculation
Let's look at a realistic scenario to understand how the math works:
- Purchase Price: $200,000
- Down Payment (20%): $40,000
- Closing Costs & Repairs: $5,000
- Total Cash Invested: $45,000
Now, let's look at the income:
- Monthly Rent: $2,000
- Monthly Mortgage: $1,100
- Monthly Expenses: $500
- Monthly Cash Flow: $400 ($2,000 – $1,100 – $500)
- Annual Cash Flow: $4,800 ($400 × 12)
CoC Return: ($4,800 / $45,000) = 10.66%. This means for every dollar you invested, you are earning 10.6 cents annually.
Why is Cash on Cash Return Important?
This metric is critical because it tells you how hard your money is working for you. If you were to buy the property in all cash, your return would likely be lower (this is the concept of leverage). By borrowing money from the bank, you can acquire the asset with less of your own capital, often increasing your percentage return on the specific dollars you invested.
Unlike the Cap Rate, which judges the property's performance independent of financing, CoC Return factors in your mortgage. This makes it a "real world" metric for what actually hits your bank account.
What is a "Good" Cash on Cash Return?
There is no single rule for a "good" return, as it varies by market and investor strategy, but general benchmarks include:
- 8% – 12%: Generally considered a solid return in stable, appreciating markets. This often beats the average stock market return.
- 15%+: Considered an excellent return, often found in lower-cost markets or properties that require significant work (value-add).
- Below 5%: Unless the property is in a high-appreciation area (like San Francisco or New York City), a return this low might suggest the property is overpriced or the rent is too low.
Limitations of this Metric
While powerful, Cash on Cash Return does not account for:
- Appreciation: The increase in property value over time.
- Principal Paydown: The portion of your mortgage payment that pays off debt, increasing your equity.
- Tax Benefits: Depreciation and other write-offs that may reduce your taxable income.
Use our Rental Property Cash on Cash Return Calculator above as a first-pass filter. If the CoC number looks good, dig deeper into the other financial benefits of the property.