Cash-on-Cash Return
Cash-on-cash return measures the annual cash flow a property produces relative to the actual cash you put in. Enter both to calculate it.
How this is calculated
Cash-on-cash return = annual pre-tax cash flow ÷ total cash invested, as a percentage. Cash flow is what's left after operating expenses and mortgage payments; cash invested is your down payment plus closing costs and any upfront capital. Unlike cap rate, it reflects your financing.
Notes & assumptions
- This is a pre-tax figure for a single year.
- It excludes appreciation, loan principal paydown, and depreciation tax benefits.
- Cash invested should include the down payment plus closing and upfront costs.
Frequently asked questions
How is cash-on-cash different from cap rate?
Cap rate is unlevered (ignores your mortgage); cash-on-cash divides your actual after-financing cash flow by the cash you invested, so leverage changes it.
Does it include appreciation?
No. Cash-on-cash is a current-income measure. Total return also includes appreciation, loan paydown, and tax benefits.
What counts as cash invested?
Your down payment plus closing costs, upfront reserves, and any initial capital improvements — the total out-of-pocket cash.
Gerald F. “Jerry” Baker, III — Founder & Managing Principal, Baker 1031 Investments · FINRA Series 22 / 63 · SIE. Read full bio →
This calculator is for educational estimation only and is not tax, legal, or investment advice. Results are approximate and depend on assumptions that may not fit your situation; confirm any figures with your own CPA and attorney before acting. Securities are offered through Aurora Securities, member FINRA/SIPC. Real estate investments involve risk, including possible loss of principal.