The yearly return on the cash you actually put in.
See what your own money earns in a rental. Enter the cash you put in and the monthly cash flow, and the cash-on-cash return calculator shows the yearly return and how many years it takes to get your cash back.
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The cash-on-cash return formula
Cash-on-cash return = yearly pre-tax cash flow ÷ total cash invested
- Total cash invested is everything that came out of your pocket: down payment, closing costs, repairs and other upfront costs. Borrowed money does not count.
- Yearly cash flow is the rent you collect minus all operating expenses and the mortgage payment, times 12. If you don't know it yet, the rental property calculator works it out.
Worked example
The calculator opens with a $50,000 down payment, $6,000 closing costs and $10,000 of repairs: $66,000 invested. The rental cash flows $450 a month, or $5,400 a year.
Cash-on-cash return: $5,400 ÷ $66,000 = 8.18%. At that pace it takes about 12.2 years of cash flow to get the $66,000 back, before counting loan paydown, appreciation or tax benefits.
What is a good cash-on-cash return?
Many rental investors look for roughly 8–12% on a cash-flow property. Lower returns can still make sense in markets with strong appreciation, and higher returns usually come with more risk or more work. Compare it with what the same cash could earn elsewhere, such as a savings account or an index fund, after accounting for the work and risk of owning a rental.
Learn more in cash-on-cash return: the metric every investor needs.
Frequently asked questions
How is cash-on-cash different from cap rate?
The cap rate measures the property with no loan (NOI ÷ price). Cash-on-cash measures your return after the mortgage, on only the cash you put in. Leverage can push cash-on-cash well above or below the cap rate. See cap rate vs. cash-on-cash.
Is cash-on-cash the same as ROI?
Not quite. Cash-on-cash only counts the cash flow. A full ROI also counts the loan being paid down, appreciation and tax savings, which is why long-term returns are usually higher than the cash-on-cash number.
What if I got all my cash back in a refinance?
Then you have no cash invested and the return is effectively infinite. That is the goal of the BRRRR method; try the BRRRR calculator.