Cash-on-Cash Return Calculator

Cash-on-cash return measures how much cash income you earn relative to the cash you actually put into the deal — your down payment plus closing costs. Unlike cap rate, CoC accounts for your mortgage payment, which makes it the investor's real return metric.

CoC = Annual Cash Flow ÷ Total Cash Invested × 100

Most rental property investments look weakest in Year 1. Rents are at their lowest, expenses haven't been optimized, and the mortgage payment is fixed. But as rent grows 2–4% per year and the loan balance slowly drops, the same property generates more cash flow on the same initial investment.

A 3% Year 1 CoC on a property that reaches 7% by Year 8 — on your original cash invested — is a fundamentally different investment than it appears on day one.

CoC captures only cash income. Total return includes principal paydown (tenants paying down your loan), appreciation (property value growth), and tax benefits. A property with a 3% CoC that also generates $400/mo in principal paydown and appreciates 3%/year may be delivering 15–20% total annual return on your cash invested — which is why cash-on-cash alone doesn't tell the full story.