Cash on Cash Return Calculator (vs Cap Rate)
See what your invested cash actually earns each year — and how it compares to the cap rate, live as you type.
The full price of the property.
Set 100% for an all-cash purchase.
Closing costs, loan points, and initial repairs paid out of pocket.
Annual interest rate on the loan.
Years to fully pay off the loan.
Rent and other income minus operating expenses, before any loan payments.
Estimates only — first-year, pre-tax figures. Not financial advice.
What Cash on Cash Return Measures (and What It Doesn't)
Cash on cash return answers one question: how hard is the cash you actually put in working? Divide your annual pre-tax cash flow — NOI minus a year of mortgage payments — by your total cash invested: down payment, closing costs, loan points, and initial repairs. A 9.64% return means every $100 of your cash brings back $9.64 in the first year, before taxes. It is a first-year, cash-only snapshot. It does not count property appreciation, the equity your tenant builds by paying down the loan, or tax effects — useful limits to know before you lean on the number.
What Is a Good Cash on Cash Return?
Take the calculator's default deal: a $500,000 rental with 25% down ($125,000) plus $10,000 in closing costs, financed at 6% over 30 years, earning $40,000 NOI. Annual debt service is $26,980, leaving $13,020 of cash flow on $135,000 invested — a 9.64% cash on cash return, inside the 8–12% range most investors call solid.
Benchmarks compiled from LoopNet (Oct 2025), Rocket Mortgage (Aug 2025), and Mashvisor — all citing the same 8–12% industry consensus. Last checked June 10, 2026.
| Cash on Cash Return | What It Means | How Investors See It |
|---|---|---|
| Below 0% | The property loses cash every month after the mortgage | Negative cash flow — you fund the deal from your own pocket, with no cushion for surprises |
| 0% – 8% | Your cash earns less than the typical target | Can still make sense in stable, low-risk markets or high-appreciation bets |
| 8% – 12% | Solid first-year return on the cash you put in | The general industry consensus for a good rental deal |
| Above 12% | Your cash is earning an outsized return | Excellent — but high returns usually ride on higher risk, so check why |
Leverage Cuts Both Ways
Borrowing money can push your cash on cash return above the cap rate — or below it. In the default deal, the loan costs 6% while the property yields an 8% cap rate, so leverage works for you: 9.64% beats 8%. Re-run the same deal at a 7% rate and annual debt service jumps to $29,939 — cash flow drops to $10,061 and the return falls to 7.45%, below the cap rate. Same building, same rent; the financing alone flipped the result. That is the whole game: when the cost of debt is below the property's yield, leverage amplifies your return. When it is above, leverage eats it. Change the interest rate in the calculator and watch the flip happen.
Cash on Cash vs. Cap Rate vs. ROI
These three metrics answer different questions. Cap rate ignores financing — it scores the property's own yield and stays the same whether you pay cash or borrow. Cash on cash return is your test: how fast does the cash you put in come back, this year? ROI zooms out to the whole holding period — appreciation, loan paydown, and sale proceeds included. If you buy all-cash, cash on cash lands almost exactly on the cap rate; the small gap is your closing costs sitting in the denominator. The deeper comparison, with worked scenarios, lives in our Cap Rate vs Cash on Cash guide.
Put your cash on cash return in context
Cash on cash tells you what your money earns. Pair it with NOI, cap rate, and DSCR to judge the whole deal.
Continue exploring cap rate
Six deeper reads — definitions, formulas, judgement, upstream NOI, metric comparisons, and city benchmarks.
How to Use
- 1
Enter the price and your down payment
Set the purchase price and your down payment percentage. Buying all-cash? Set the down payment to 100% — the loan disappears and the math adjusts automatically.
- 2
Add your upfront costs
Count every dollar that leaves your pocket at the start: closing costs, loan points, and initial repairs. Flippers: this is where the rehab budget goes.
- 3
Add loan terms and NOI
Enter the interest rate, loan term, and annual net operating income — rent minus operating expenses, before any loan payments. No NOI yet? Run the NOI Calculator first.
- 4
Read your return — and the cap rate next to it
The result updates as you type. Compare the cash on cash return with the cap rate on the same deal: if it is higher, your financing is helping; if lower, the debt is eating your yield.
Frequently Asked Questions
Is a 10% cash on cash return good?
What does a 5% cash on cash return mean?
Is cash on cash return calculated for the first year only?
Does cash on cash return include mortgage payments?
What counts as total cash invested?
What is the difference between cash on cash return and ROI?
What is the difference between cash on cash return and cap rate?
Does cash on cash return include equity or appreciation?
Related Tools
Cap Rate Calculator
Calculate your property's capitalization rate instantly with our professional tool. Factor in income and expenses for accurate real estate yield analysis.
NOI Calculator
Accurately calculate Net Operating Income (NOI) by subtracting all operating expenses from revenue. Essential for professional real estate property valuation.
DSCR Calculator
Calculate the Debt Service Coverage Ratio used by lenders to evaluate loans.
Property Value Calculator
Estimate property value from NOI and market cap rate with a reverse cap rate calculator based on the income capitalization approach.