Cash-on-Cash Return Calculator
Calculate cash-on-cash return for real estate investments
About this calculator
The Cash-on-Cash Return Calculator helps real estate investors evaluate the profitability of their investment properties by measuring annual pre-tax cash flow against the initial cash invested. This metric is crucial for comparing different investment opportunities and determining whether a property generates adequate returns relative to the cash you've put down. Unlike other return metrics, cash-on-cash return focuses specifically on actual cash received, making it ideal for investors who prioritize immediate cash flow over long-term appreciation.
How to use
Enter your total initial cash investment, including down payment, closing costs, and renovation expenses. Then input your annual pre-tax cash flow, which is your rental income minus all operating expenses and loan payments. The calculator will instantly display your cash-on-cash return percentage, helping you assess the investment's cash flow performance.
Frequently asked questions
What is a good cash-on-cash return for real estate?
Generally, 8-12% is considered good, though this varies by market conditions, property type, and investment strategy. Higher returns often indicate higher risk.
How is cash-on-cash return different from ROI?
Cash-on-cash return only considers cash invested and received, while ROI includes appreciation and other factors. It's more focused on immediate cash flow performance.
Should I include closing costs in my initial investment?
Yes, include all upfront cash expenses like down payment, closing costs, inspection fees, and immediate repairs to get an accurate return calculation.