Cash-on-Cash Return Calculator
Calculate your cash yield on invested capital — the core metric for evaluating rental property cash flow. Includes leverage comparison, sensitivity analysis, and full portfolio CoC tracking.
Leverage (using debt) amplifies cash-on-cash return by reducing the cash invested while keeping the same NOI. Enter your property details:
| Strategy | Down Payment | Cash Invested | Annual Cash Flow | CoC Return |
|---|---|---|---|---|
| All Cash | 100% | $355,000 | $18,000 | 5.07% |
| 25% Down | 25% | $92,500 | -$2,957 | -3.20% |
| 10% Down | 10% | $40,000 | -$7,148 | -17.87% |
CoC only measures cash flow. Total return includes appreciation, principal paydown, and tax benefits. Here's the full picture:
How to Use This Cash-on-Cash Return Calculator
Cash-on-cash return (CoC) measures the annual cash yield on the actual dollars you invested. Enter four numbers to see your return instantly:
- Down Payment: The cash portion of the purchase price you paid out of pocket.
- Closing Costs: All transaction costs paid at closing — lender fees, title insurance, escrow, recording fees.
- Repair / Rehab Costs: Any renovation or repair costs you paid before the property generated income.
- Annual Pre-Tax Cash Flow: Net Operating Income minus annual mortgage payments (P+I). This can be negative.
The calculator shows your CoC return, monthly cash flow, and how it benchmarks against industry standards.
The Cash-on-Cash Return Formula
Annual Cash Flow = NOI − Annual Mortgage Payment
Cash-on-Cash Return = Annual Cash Flow ÷ Total Cash Invested × 100
Example: $8,400 cash flow ÷ $85,000 invested = 9.9% CoC
CoC is calculated pre-tax because tax situations vary by investor. It also excludes appreciation, principal paydown, and depreciation — it focuses purely on the cash yield from the cash you deployed.
CoC vs. Cap Rate
Cap rate measures property performance independent of financing. CoC measures your return on the specific investment you made. The same property can have a 6% cap rate with a 4% CoC (high leverage) or an 8% CoC (lower leverage). Both metrics are needed to fully evaluate a deal.
CoC Return Benchmarks
| CoC Range | Rating | Context |
| Below 0% | Negative Cash Flow | Paying out of pocket each month. Only viable for strong appreciation bets. |
| 0%–4% | Poor | Below money market rates. Not worth the risk and management burden. |
| 4%–7% | Fair | Typical for primary markets (NYC, SF, LA). Investors accept lower CoC for appreciation. |
| 7%–10% | Good | Solid cash-flowing investment. Common in secondary and Sun Belt markets. |
| Above 10% | Excellent | Strong cash flow. Often found in Midwest high-yield markets or distressed deals. |
How Leverage Amplifies Cash-on-Cash Return
Leverage is the single biggest driver of CoC return. Here's an illustration with a $350,000 property generating $20,000 NOI at 7% financing:
| All Cash | 25% Down | 10% Down | |
| Cash Invested | $355,000 | $92,500 | $40,000 |
| Annual Mortgage | $0 | $16,650 | $22,260 |
| Annual Cash Flow | $20,000 | $3,350 | -$2,260 |
| CoC Return | 5.6% | 3.6% | Negative |
This example shows leverage isn't always beneficial for CoC — at high interest rates or low NOI, more leverage can hurt cash flow. The optimal leverage depends on the spread between cap rate and interest rate.