Cash-on-Cash Return Calculator

Cash-on-cash return calculator for rental property investors

Cash-on-cash return answers one specific question: “Based on the cash I put into this deal, what annual cash return am I getting from operations?” It is a practical metric for comparing rental deals when you are using cash plus financing, because it focuses on the money you actually had to pay out of pocket. This calculator is locked to rental income performance only. It does not try to estimate resale profits, appreciation, or tax benefits.

To use it, enter your monthly rent, your monthly operating expenses (everything that keeps the property running, excluding the mortgage), your monthly mortgage payment, and your total cash invested. Total cash invested should include down payment, closing costs, initial repairs, and any cash you had to contribute to get the property rent-ready. The calculator then estimates monthly and annual cash flow and converts that into a cash-on-cash return percentage.

Beyond the headline percentage, the calculator also gives a few decision-friendly supporting figures. It shows the annual cash flow in currency terms, an estimated payback period (how many years of cash flow it takes to earn back your original cash investment), a break-even rent estimate (the rent level needed to reach zero cash flow), and a simple sensitivity check that shows what happens to your return if rent is 10% lower or 10% higher than expected. These are meant to help you sanity-check a deal quickly.

Assumptions and how to use this calculator

• This calculator is for rental operations only and ignores resale profit, appreciation, and transaction costs on exit.
• Operating expenses are treated as a monthly amount you provide, and the optional advanced percentages add on top of that.
• Vacancy is applied as a reduction to income, not as an increase to expenses, and it is treated as an average over a year.
• Property management is calculated as a percentage of effective collected income (after vacancy), when used.
• Maintenance and capex reserve is calculated as a percentage of gross monthly income (rent plus other income), when used.

Common questions

What does cash-on-cash return actually measure?

It measures the annual pre-tax cash flow you receive from the property divided by the cash you invested to acquire and stabilize it. If your annual cash flow is 24,000 and your total cash invested was 240,000, your cash-on-cash return is 10%. It is a direct “cash yield” on your out-of-pocket investment.

What should I include in “total cash invested”?

Include any cash that had to leave your bank account to make the deal happen and produce rent. Common items are down payment, closing costs, transfer fees, immediate repairs or rehab, initial furnishing costs (if relevant to how you rent it), and any reserves you had to fund. Do not include the loan principal, because that is not cash you invested. If you are unsure, it is better to slightly overestimate cash invested than to understate it.

Why does vacancy matter if I already know my monthly rent?

Most rentals do not collect rent every month of the year without interruption. Even stable properties have occasional turnover, late payments, or short gaps. Vacancy allowance is a way to “annualize reality” so your cash flow estimate is not overly optimistic. If you have unusually stable occupancy, reduce vacancy. If the area has higher turnover, increase it.

How should I treat maintenance and capex reserves?

These are not always paid every month, but costs like repairs, appliances, paint, and roof replacement are real over time. A reserve percentage turns irregular costs into a steady allowance so you do not overstate cash flow. If your operating expenses already include a realistic maintenance line, you can set the reserve percentage to zero to avoid double-counting.

What does “break-even rent” mean here?

Break-even rent is the estimated rent level where monthly cash flow becomes zero, given your inputs and optional advanced assumptions. It helps you understand how much downside room you have. If the break-even rent is close to your expected rent, the deal has little margin for error. If the calculator cannot compute a meaningful break-even rent under your chosen percentages, it will tell you.

When is cash-on-cash return not the right metric?

It is not ideal when your main goal is resale profit, when you are comparing deals with very different tax situations, or when the property is intentionally run at low cash flow to target appreciation. In those cases you may still compute cash-on-cash, but you should not use it as the sole decision metric. This page intentionally excludes those adjacent use cases to stay focused on rental cash yield.