Cash-on-Cash Return Calculator
Evaluate cash flow, cash invested, and return assumptions.
Investment Assumptions
What is cash-on-cash return?
Cash-on-cash return estimates the annual pre-tax cash flow produced by a property compared to the actual cash invested in the deal.
This metric is useful because it focuses on the investor's actual out-of-pocket cash and annual cash performance after debt service, not just whether the property can support a loan. It is different from DSCR because DSCR measures debt coverage, while cash-on-cash return measures how hard your invested cash is working.
Important note
Cash-on-cash return does not include appreciation, depreciation, tax benefits, principal paydown, or future rent growth. Use it as a screening tool, not a complete investment analysis.
How to use this cash-on-cash calculator
Find Cash-on-Cash Return — Enter income, expenses, debt service, and total cash invested. The calculator estimates annual cash flow and return.
Find Required Cash Flow — Enter total cash invested and a target return. The calculator shows the annual and monthly cash flow needed.
Find Max Cash Invested — Enter cash flow and a target return. The calculator estimates the maximum cash investment supported by that return target.
Find Minimum Rent — Enter expenses, debt service, cash invested, and target return. The calculator estimates the monthly rent needed to hit the target.
How leverage affects cash-on-cash return
Leverage can significantly increase cash-on-cash return because the investor controls a larger asset with less cash invested. If rental income and appreciation perform well, borrowed money can amplify returns on invested equity.
However, leverage also increases risk. Higher debt service leaves less room for vacancy, repairs, unexpected expenses, or changes in market conditions. A property with strong leverage can produce excellent returns during stable periods while becoming difficult to support during weaker operating periods.
That is why cash-on-cash return should always be evaluated alongside DSCR, operating reserves, and the overall stability of the property's income.
Why the accuracy of your assumptions is important
Cash-on-cash return calculations are highly sensitive to rent assumptions, vacancy, repair costs, management expenses, debt service, and total cash invested.
Less experienced investors often underestimate turnover costs, repair reserves, holding costs, and the amount of capital required to stabilize a property after acquisition. Small changes in cash flow can materially affect projected returns, particularly when leverage is involved.