Cash on Cash Return Calculator
Calculate the cash on cash return on your real estate investment. Enter your annual pre-tax cash flow and total cash invested to see your CoC return percentage.
Net rental income after all expenses and debt service
Down payment + closing costs + renovation
Enter your annual cash flow and total cash invested, then click Calculate to see your return.
How Cash on Cash Return Works
What Is Cash on Cash Return?
Cash on cash return (CoC return) is one of the most important metrics for real estate investors, especially those using financing to purchase rental properties. It measures the annual pre-tax cash flow you receive as a percentage of the total cash you actually invested out of pocket. The formula is straightforward: divide your annual pre-tax cash flow by your total cash invested, then multiply by 100 to get a percentage.
Why Cash on Cash Return Matters
Unlike metrics that look at the entire property value, CoC return focuses on the real dollars you put into a deal. This makes it particularly valuable for leveraged investments where you’re using a mortgage. Two properties might have the same cap rate, but very different cash on cash returns depending on the financing terms, down payment size, and closing costs involved.
For example, if you invest $50,000 (down payment plus closing costs plus any renovation) into a rental property and it generates $5,000 per year in net cash flow after all expenses and mortgage payments, your cash on cash return is 10%. This tells you that your invested capital is earning 10% annually in cash flow alone, before considering any appreciation or equity paydown.
How It Differs From Cap Rate
Cap rate assumes an all-cash purchase and uses net operating income (before debt service). Cash on cash return uses actual cash flow after mortgage payments and is based only on the cash you invested, not the full property price. This makes CoC return a better measure of your personal return when using leverage. A property with a 6% cap rate could yield a 12% or higher CoC return with favorable financing, because leverage amplifies your returns on invested capital.
When to Use This Metric
Use cash on cash return when comparing rental property investments, evaluating whether a deal meets your minimum return threshold, or deciding between different financing options for the same property. Most experienced investors target a minimum CoC return of 8–12% for rental properties.