Cost Calculator AI
Real Estate & PropertyLeveraged Cash Yield

Cash-on-Cash Return Calculator

Calculate your annual Cash-on-Cash (CoC) return percentage, monthly pre-tax cash flow, and simple cash payback period based on your total initial out-of-pocket cash invested.

Annual Pre-Tax Cash Flow & Initial Cash Invested

Cash-on-Cash Return
Cash-on-Cash Return Percentage
9.51%

Simple Cash Payback: 10.5 years

Monthly Pre-Tax Cash Flow$650.00/mo
Total Cash Invested$82,000.00

Cash-on-Cash Return Formula

Cash-on-Cash Return (%) = (Annual Pre-Tax Cash Flow รท Total Initial Cash Invested) ร— 100
  • Annual Pre-Tax Cash Flow = Net Operating Income (NOI) minus Annual Mortgage Debt Service.
  • Total Initial Cash Invested = Down Payment + Buyer Closing Costs + Upfront Rehab/Make-Ready Costs.
  • Simple Cash Payback Period (Years) = Total Initial Cash Invested รท Annual Pre-Tax Cash Flow.

Step-by-Step Worked Example

Scenario: Earning $7,800/year ($650/month) in pre-tax cash flow after putting $82,000 total cash into a rental property acquisition

Calculation Steps:

  1. Cash-on-Cash Return = ($7,800 รท $82,000) ร— 100 = 9.51%
  2. Simple Cash Payback Period = $82,000 รท $7,800 = 10.5 years
Result: Your Cash-on-Cash Return is 9.51% per year, with a 10.5-year simple cash payback period.

How to Use This Calculator

  1. 1Enter your annual pre-tax cash flow (annual net rental income after all operating expenses and mortgage payments).
  2. 2Enter your total initial out-of-pocket cash invested (down payment plus closing costs and initial repairs).

Assumptions & Limitations

  • Measures current annual cash yield on invested cash; does not include loan principal paydown, tax depreciation benefits, or property appreciation (use the Real Estate Investment Calculator for full hold-period returns).

Frequently Asked Questions

How is Cash-on-Cash Return different from Cap Rate?

Cap Rate ignores mortgage financing and divides Net Operating Income (NOI) by the total purchase price. Cash-on-Cash Return includes mortgage payments and divides your actual pre-tax cash flow by only the out-of-pocket cash you invested.

What is a good Cash-on-Cash Return for rental real estate?

While target returns vary by market risk and interest rates, many cash-flow-focused investors look for an 8% to 12%+ Cash-on-Cash return.

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