Measure cash return
The metric compares annual pre-tax cash flow with out-of-pocket capital such as down payment, closing costs, rehab, and reserves.
- Annual cash flow
- Cash invested
- Financing assumptions
Cash-on-cash calculator
Cash-on-cash return calculator methodology for real estate investors.
Cash-on-cash return helps investors evaluate how much annual cash flow a property may produce relative to the cash invested.
Best for rentals
Cash-on-cash return is especially useful for buy-and-hold properties where monthly income and financing structure matter.
Add property context
Investors should combine the metric with property condition, taxes, mortgage data, rent assumptions, and market comps.
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FAQ
How do you calculate cash-on-cash return?
Divide annual pre-tax cash flow by total cash invested. The quality of the result depends on accurate income, expense, financing, and reserve assumptions.
Is cash-on-cash return the same as ROI?
No. ROI can include total profit or appreciation, while cash-on-cash focuses on annual cash flow relative to cash invested.