Cash On Cash Return
Calculator
Results
- Cash on cash return (%)
- 12.75862
- Monthly cash flow
- 1,541.666666
- Payback period (years)
- 7.837837
Property management results
| Cash on cash return (%) | 12.75862 |
| Monthly cash flow | 1,541.666666 |
| Payback period (years) | 7.837837 |
formula-map diagram
- Cash on cash return (%)
- 12.75862
- Monthly cash flow
- 1,541.666666
- Payback period (years)
- 7.837837
Property management relationship
Formula
Cash on cash = annual cash flow ÷ cash invested × 100= 12.758620689655
Note
This is a simplified model: it applies the standard property-management definition to the numbers you entered. Rent affordability uses a flat share-of-income rule and ignores credit history, local screening criteria and household size. Proration assumes a plain daily rate; your lease or local law may prescribe a different convention (for example a fixed 30-day month). Security-deposit interest is simple interest at the rate you enter, while many jurisdictions set the rate, the compounding and the payout schedule by statute. Income, expense, reserve and escalation figures are straight-line and assume the amounts you enter hold steady; they ignore taxes, depreciation, financing changes, capital events, inflation and market turnover. Lease buyout compares the contractual penalty with the remaining rent only and is not a reading of your lease. These results are general information, not legal, tax or investment advice: check your lease and local tenancy law and consult a qualified professional before acting.
More in Property management
See all →Frequently asked questions
What is cash-on-cash return measuring, and how is it different from cap rate?+
Cash-on-cash return is the annual pre-tax cash flow divided by the actual cash invested (down payment, closing costs, initial repairs), showing the return on the equity you put in. Cap rate ignores financing entirely and looks at NOI relative to purchase price, so cash-on-cash is the more relevant number once a mortgage is involved.
Why can a leveraged property show a higher cash-on-cash return than its cap rate?+
When the cap rate exceeds the mortgage interest rate, borrowing amplifies the return on the smaller amount of cash actually invested — this is positive leverage. If the mortgage rate exceeds the cap rate, leverage works in reverse and cash-on-cash return falls below the cap rate.
What should be included in the 'cash invested' figure?+
Cash invested should include the down payment, closing costs, loan fees, and any upfront capital improvements or reserve funding needed to get the property rent-ready. Leaving out closing costs or renovation spend is a common mistake that makes the return look better than it really is.
Is cash-on-cash return calculated before or after taxes?+
It's almost always calculated pre-tax, using cash flow after debt service but before income taxes, since tax situations vary too much by investor to standardize. Investors who want an after-tax view need to layer in depreciation and their marginal tax rate separately.
What is considered a good cash-on-cash return?+
Many investors target 8-12% for stabilized residential rentals, though this varies heavily by market, risk tolerance, and how much value-add potential the deal has. A very high cash-on-cash figure on paper is worth double-checking for unrealistic assumptions about rent, expenses, or vacancy.