Cash-on-Cash Return Calculator
Cash-on-cash return (CoC) measures how efficiently your invested cash generates income from a rental property, after accounting for mortgage payments. It is the ratio of annual pre-tax cash flow to total cash invested. If you put $100,000 into a deal and receive $8,000 in annual cash flow after mortgage payments, your CoC return is 8%. This is one of the most practical metrics for leveraged real estate investments because it reflects the actual dollars going into and coming out of your pocket each year.
Cash-on-cash return formula
CoC Return (%) = Annual Pre-Tax Cash Flow / Total Cash Invested x 100
Annual Pre-Tax Cash Flow = Gross Rental Income - Vacancy Losses - Operating Expenses - Annual Debt Service
Total Cash Invested = Down Payment + Closing Costs + Upfront Repairs and Improvements
What counts as total cash invested?
- Down payment (the equity portion of the purchase price)
- Loan origination fees and points paid at closing
- Escrow, title, and other closing costs
- Immediate repairs or renovations completed before the property is rented
- Reserves held in escrow at closing (if you count them as cash out of pocket)
Cash-on-cash return calculator: frequently asked questions
What is cash-on-cash return?
Cash-on-cash return (CoC) is the ratio of annual pre-tax cash flow to total cash invested in a property, expressed as a percentage. Unlike cap rate, it accounts for financing costs (mortgage payments), making it a measure of how well your actual cash investment performs.
What is the cash-on-cash return formula?
Cash-on-Cash Return = Annual Pre-Tax Cash Flow / Total Cash Invested x 100. Annual pre-tax cash flow is NOI minus annual debt service (mortgage payments). Total cash invested includes down payment, closing costs, and any upfront repairs or improvements.
What is a good cash-on-cash return?
Most real estate investors target a cash-on-cash return of 8 to 12% or more. However, acceptable rates vary by market, risk tolerance, and investment strategy. In competitive urban markets, 5 to 7% may be considered reasonable, while investors in higher-risk markets may require 12% or more.
How does cash-on-cash differ from cap rate?
Cap rate ignores financing and measures the unlevered return on the full property value. Cash-on-cash uses actual cash flow after debt service and relates it to the cash you personally invested. If you pay cash, the two metrics will be similar; if you use a mortgage, CoC can be higher or lower than cap rate depending on leverage.
Does cash-on-cash return include appreciation?
No. Cash-on-cash return measures only the income return from cash flow, not appreciation in property value. To include appreciation and equity pay-down, calculate total return on investment (ROI) instead. CoC is best for evaluating current income performance.
Official sources
- National Association of Realtors (NAR): Research and Statistics.
- CCIM Institute: Financial Analysis for Commercial Investment Real Estate.
- Federal Deposit Insurance Corporation (FDIC): Real Estate Lending Guidelines.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.