Cash-on-Cash Return Calculator
Calculate your real return on invested cash. Analyze leverage impact, run sensitivity scenarios, and project 30-year wealth building for any rental property.
Purchase
Income
Expenses
Cash-on-Cash Return
-3.62%
Negative cash flow
Annual Cash Flow
-$2,537
Monthly Cash Flow
-$211
Total Cash Invested
$70,000
Cap Rate
4.97%
Income
Expenses & Debt
Leverage Comparison
See how different down payments affect your cash-on-cash return:
| Down Payment | Cash Invested | Cash-on-Cash |
|---|---|---|
| 0% (All Cash) | $7,500 | -100.36% |
| 10% | $32,500 | -17.02% |
| 20% | $57,500 | -6.15% |
| 25%Current | $70,000 | -3.62% |
| 30% | $82,500 | -1.87% |
Sensitivity Analysis
Cash-on-cash return at different rent and price levels:
| Price \ Rent | -20% $1,440 | -10% $1,620 | Current $1,800 | +10% $1,980 | +20% $2,160 |
|---|---|---|---|---|---|
| -20% $200,000 | -5.0% | -2.1% | 0.8% | 3.7% | 6.6% |
| -10% $225,000 | -6.8% | -4.2% | -1.6% | 1.0% | 3.6% |
| Current $250,000 | -8.4% | -6.0% | -3.6% | -1.2% | 1.1% |
| +10% $275,000 | -9.7% | -7.5% | -5.3% | -3.1% | -0.9% |
| +20% $300,000 | -10.7% | -8.7% | -6.7% | -4.7% | -2.7% |
Multi-Year Projection
Projected cash flow, equity buildup, and cumulative returns (assumes constant rent and expenses):
| Year | Cash Flow | Principal Paid | Equity | Cumulative Cash |
|---|---|---|---|---|
| 1 | -$2,537 | $1,905 | $64,405 | -$2,537 |
| 2 | -$2,537 | $2,042 | $66,447 | -$5,075 |
| 3 | -$2,537 | $2,190 | $68,637 | -$7,612 |
| 4 | -$2,537 | $2,348 | $70,985 | -$10,149 |
| 5 | -$2,537 | $2,518 | $73,503 | -$12,687 |
| 6 | -$2,537 | $2,700 | $76,203 | -$15,224 |
| 7 | -$2,537 | $2,895 | $79,099 | -$17,761 |
| 8 | -$2,537 | $3,105 | $82,203 | -$20,298 |
| 9 | -$2,537 | $3,329 | $85,532 | -$22,836 |
| 10 | -$2,537 | $3,570 | $89,102 | -$25,373 |
Increase Rent, Boost Returns
A 10% rent increase from virtual staging directly improves your cash-on-cash return. Professional staging at $0.10/photo — the highest-ROI investment for landlords.
What is a Good Cash-on-Cash Return?
How to interpret your CoC return result and what it means for your investment:
< 6%
Below Average
Weak return for the cash invested. Consider negotiating price, increasing rent, or reducing expenses.
6-8%
Average
Acceptable for low-risk markets. Common in stable suburban areas with appreciation potential.
8-12%
Good
Solid investment territory. Strong cash flow with reasonable risk. Target for most investors.
12%+
Excellent
Outstanding return on invested cash. Often found in value-add deals or high-yield markets.
Cash-on-Cash vs Cap Rate vs ROI
Three metrics, three perspectives on the same investment:
Cash-on-Cash
Cash Flow / Cash Invested
Pros: Shows return on YOUR money. Accounts for financing and leverage.
Cons: Ignores appreciation, tax benefits, and principal paydown.
Best for: Comparing deals with different financing
Cap Rate
NOI / Property Price
Pros: Financing-independent. Easy to compare across properties.
Cons: Ignores leverage, debt service, and actual cash invested.
Best for: Comparing properties regardless of financing
Total ROI
(Cash Flow + Equity + Appreciation) / Cash Invested
Pros: Most complete picture. Includes all return sources.
Cons: Relies on appreciation assumptions. Complex to calculate.
Best for: Long-term investment analysis
How Cash-on-Cash Return Works
Given: Purchase price = $250,000 | Down payment = 25% ($62,500) | Closing costs = $7,500 | Monthly rent = $1,800 | 7% interest, 30-year loan
Step 1: Total Cash Invested = $62,500 + $7,500 = $70,000
Step 2: Annual Gross Rent = $1,800 x 12 = $21,600
Step 3: Effective Income = $21,600 - 5% vacancy = $20,520
Step 4: Operating Expenses = $3,000 + $1,200 + $2,160 + $1,728 = $8,088
Step 5: NOI = $20,520 - $8,088 = $12,432
Step 6: Annual Mortgage = $1,247/mo x 12 = $14,965
Step 7: Annual Cash Flow = $12,432 - $14,965 = -$2,533
Step 8: Cash-on-Cash = -$2,533 / $70,000 = -3.62%
At current rates, this deal has negative cash flow. To make it work, you could negotiate a lower price, increase rent with staging, or increase your down payment to reduce debt service. Use the sensitivity analysis to find the break-even point.
How to Improve Your Cash-on-Cash Return
Maximize Rental Income
Virtual staging increases rent by 5-15%. A $200/mo rent increase on $70K invested adds 3.4% to your CoC return.
Optimize Leverage
Use the leverage table to find the sweet spot. More leverage amplifies returns when cap rate exceeds mortgage rate.
Reduce Vacancy
Each month vacant costs you one month of rent. Staged listings rent 73% faster, protecting your CoC return.
Control Expenses
Track actual expenses vs projections. A 1% reduction in operating expenses directly boosts your annual cash flow.
Frequently Asked Questions
What is cash-on-cash return?
Cash-on-cash (CoC) return measures the annual pre-tax cash flow earned on the actual cash invested in a rental property. The formula is: Annual Cash Flow / Total Cash Invested x 100. Unlike cap rate, CoC accounts for financing — it tells you the return on YOUR money, not the total property value.
What is a good cash-on-cash return?
A good cash-on-cash return depends on market conditions and risk tolerance. Generally: below 6% is below average, 6-8% is average, 8-12% is good, and 12%+ is excellent. In 2026 with higher interest rates, 8%+ CoC is considered strong. Many investors use 8% as their minimum threshold.
What is the difference between cash-on-cash return and cap rate?
Cap rate measures unlevered return (NOI / Property Price) — it ignores financing. Cash-on-cash measures levered return (Cash Flow / Cash Invested) — it includes mortgage payments. CoC shows what YOU actually earn on your down payment. With leverage, CoC can be much higher than cap rate if the property cash flows positively.
How does leverage affect cash-on-cash return?
Leverage amplifies returns in both directions. When a property earns more than the mortgage costs (positive leverage), using a smaller down payment increases CoC return. For example, a property with 5% cap rate and 6.5% mortgage rate has negative leverage — paying all cash would yield a higher CoC. The leverage comparison table in our calculator shows this effect.
How can I improve my cash-on-cash return?
To improve CoC: (1) Increase rent — virtual staging can boost rent 5-15% by making listings more attractive. (2) Reduce vacancy — staged properties rent faster. (3) Negotiate a lower purchase price. (4) Reduce operating expenses. (5) Use optimal leverage — find the sweet spot between down payment and mortgage cost. (6) Reduce closing costs by shopping lenders.