Measure the annual return on the actual cash you put in. Enter monthly rent, expenses, mortgage and your total cash invested (deposit + closing + rehab).
Cash-on-cash = annual pre-tax cash flow ÷ total cash invested. Unlike cap rate, it accounts for your mortgage and only the cash you actually put in — the truest measure of a financed deal's return.
Cap rate ignores financing; cash-on-cash return measures the yield on the real cash you invested (down payment, closing costs, renovation). For a leveraged purchase it's the number that tells you how hard your money is working. Many investors target 8%+ cash-on-cash.
Say you buy a rental for $300,000 with 25% down ($75,000), plus $6,000 in closing costs and $9,000 in light renovations — $90,000 total cash invested. Rent comes in at $2,200/month, expenses (insurance, taxes, maintenance, management) run $500/month, and the mortgage payment is $1,350/month. Monthly cash flow is $2,200 − $500 − $1,350 = $350, or $4,200/year. Cash-on-cash return = $4,200 ÷ $90,000 = 4.7% — below the 8% many investors target, which usually means either the purchase price is too high relative to rent, or a larger down payment would free up more monthly cash flow at the cost of a lower return on the extra cash tied up.
Many rental investors aim for 8–12% cash-on-cash, though it varies by market and risk. Higher leverage can raise CoC but also increases risk.
Your down payment plus closing costs, plus any upfront renovation or furnishing — every dollar of your own money in the deal.
Cash-on-cash looks only at annual cash flow vs cash in. Total ROI also adds appreciation and loan paydown, which this quick calculator doesn't include.
RentFlow keeps rent, costs and occupancy per unit so your real returns stay up to date. Free to start.
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