Calculator Panel
Calculation Ready
Enter your values above and click Calculate.
What This Calculator Does
This calculator isolates your cash-on-cash return, helping you evaluate if your investment is outperforming safer assets like high-yield savings or index funds.
How to Use This Calculator
Enter your cash down payment, closing costs, upfront repair/rehab budget, and annual pre-tax cash flow, then click Calculate.
How the Calculation Works
The underlying math engine processes your inputs using exact formulas. This systematic approach ensures professional, institutional-grade calculation precision:
Mathematical Formula
Formula Legend:
- · Down Payment = Cash down payment paid at purchase.
- · Closing Costs = Loan origination, legal, transfer, and title fees.
- · Upfront Repairs = Capital spent immediately to get the property rent-ready.
- · Annual Pre-tax Cash Flow = Rent collected minus operating expenses and mortgage payments.
Practical Example
Suppose you buy a property, putting $60,000 down, paying $6,000 in closing costs, and spending $14,000 on immediate cosmetic repairs (total cash invested = $80,000). Your property generates $5,600 in net annual cash flow after all expenses and mortgage payments:
Step-by-Step Mathematical Walkthrough:
- 1 Find Total Cash Invested: $60,000 + $6,000 + $14,000 = $80,000.
- 2 Apply formula: ($5,600 / $80,000) * 100 = 7.00%.
- 3 Your Cash-on-Cash return is 7.00%. This is the actual cash yield you receive on your out-of-pocket money.
Important Assumptions & Notes
- Closing costs and repair expenses are added directly to the investment basis.
- Cash flow is calculated on a pre-tax basis.
Common Mistakes or Considerations
- Omitting upfront repair costs when calculating total cash invested, which artificially inflates your reported return rate.
Frequently Asked Questions
Why is Cash-on-Cash Return important?
It measures the actual cash flow efficiency of your capital. Unlike paper gains (like appreciation or equity paydown), cash-on-cash return tells you exactly how much cash is going into your bank account compared to what you spent out of pocket.
How is Cash-on-Cash return different from Cap Rate?
Cap Rate assumes you paid 100% cash and has no mortgage. Cash-on-Cash return factors in both your down payment (leverage) and your mortgage payment, representing your true personal investment return.