# What is my cash on cash return?

Works out the cash on cash return of a rental property: the yearly cash flow after expenses and loan payments, divided by the cash you put in (down payment, closing costs and repairs).

- Page: https://www.acalculator.org/finance/cash-on-cash-return-calculator
- JSON spec: https://www.acalculator.org/finance/cash-on-cash-return-calculator.json
- Version: 5524e51043ab

## Default answer

Example with the default inputs (Purchase price $300,000.00, Down payment $60,000.00, Closing costs $9,000.00, Repairs before renting $0.00, Rent per month $2,500.00, Vacancy 5%, Operating expenses per month $700.00, Loan payment Work it out, Loan interest rate 7%, Loan term (years) 30): Your cash on cash return is 1.36%: $939.29 a year on $69,000.00 of cash invested.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| price | Purchase price | What you pay for the property. |
| down | Down payment | The cash you pay toward the price; the rest is borrowed. |
| close | Closing costs | Cash paid at closing: fees, points, title, inspections. |
| fix | Repairs before renting | Cash spent to make the property ready to rent. |
| rent | Rent per month | The rent the property earns each month when it is let. |
| vac | Vacancy | The share of the year the property is expected to sit empty. |
| exp | Operating expenses per month | Property taxes, insurance, maintenance, management, HOA and utilities you pay; not the loan. |
| loan | Loan payment | Work out the monthly loan payment from the rate and term, or type the payment. |
| rate | Loan interest rate | The yearly interest rate of the loan; the monthly rate is this ÷ 12. |
| term | Loan term (years) | How many years of monthly payments. |
| pmt | Monthly loan payment | Principal and interest paid each month. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| coc | Cash on cash return | Annual cash flow ÷ total cash invested × 100. |
| cashFlow | Annual cash flow | Net operating income − loan payments for the year. |
| monthly | Monthly cash flow | Annual cash flow ÷ 12. |
| invested | Total cash invested | Down payment + closing costs + repairs. |
| noi | Net operating income | Rent for the year after vacancy − operating expenses for the year. |
| debt | Loan payments a year | The monthly loan payment × 12. |
| payment | Monthly loan payment | The level payment on the loan, or the payment you typed. |
| loanAmount | Loan amount | Purchase price − down payment. |
| capRate | Cap rate | Net operating income ÷ purchase price × 100, the return with no loan and no closing costs. |

## Method

Cash on cash return = (12 × rent × (1 − vacancy) − 12 × expenses − 12 × loan payment) ÷ (down payment + closing costs + repairs) × 100.

## Assumptions

- Before tax: income tax and depreciation are left out.
- The loan is price − down payment, repaid in level monthly payments at the yearly rate ÷ 12.
- Rent, vacancy and expenses are the same every month of the first year.

## Worked examples

1. price = $1,200,000.00, down = $300,000.00, rent = $5,000.00, vac = 0%, exp = $0.00, loan = known, pmt = $2,000.00 gives coc = 12%, cashFlow = $36,000.00, noi = $60,000.00, invested = $300,000.00. Source: Cash on cash return, Wikipedia (the ratio of annual before-tax cash flow to the total amount of cash invested, as a percent; example: $300,000 down, $5,000 a month of cash flow after expenses less $2,000 a month of mortgage payments gives $36,000 ÷ $300,000 = 12%), https://en.wikipedia.org/wiki/Cash_on_cash_return (retrieved 2026-10-02).
2. price = $200,000.00, down = $200,000.00, close = $5,000.00, rent = $1,800.00, vac = 0%, exp = $500.00, loan = calc, rate = 7%, term = 30 gives coc = 7.609756%, cashFlow = $15,600.00, pmt = $0.00, capRate = 7.8%. Source: Cash on cash return, Wikipedia (the ratio of annual before-tax cash flow to the total amount of cash invested, as a percent; example: $300,000 down, $5,000 a month of cash flow after expenses less $2,000 a month of mortgage payments gives $36,000 ÷ $300,000 = 12%), https://en.wikipedia.org/wiki/Cash_on_cash_return (retrieved 2026-10-02); IRS, Publication 527 (2025), Residential Rental Property (rental income and rental expenses such as insurance, property taxes, repairs and maintenance, management fees and mortgage interest), https://www.irs.gov/publications/p527 (retrieved 2026-10-02).
3. price = $300,000.00, down = $60,000.00, close = $9,000.00, rent = $2,500.00, vac = 5%, exp = $700.00, loan = calc, rate = 7%, term = 30 gives pmt = $1,596.73, noi = $20,100.00, cashFlow = $939.29, coc = 1.361287%, capRate = 6.7%. Source: Mortgage calculator, Wikipedia (monthly payment c = rP ÷ (1 − (1 + r)^−N) for principal P, monthly rate r and N payments), https://en.wikipedia.org/wiki/Mortgage_calculator (retrieved 2026-10-02); Cash on cash return, Wikipedia (the ratio of annual before-tax cash flow to the total amount of cash invested, as a percent; example: $300,000 down, $5,000 a month of cash flow after expenses less $2,000 a month of mortgage payments gives $36,000 ÷ $300,000 = 12%), https://en.wikipedia.org/wiki/Cash_on_cash_return (retrieved 2026-10-02).
4. price = $150,000.00, down = $30,000.00, close = $4,000.00, fix = $6,000.00, rent = $1,600.00, vac = 8%, exp = $450.00, loan = calc, rate = 6.5%, term = 30 gives pmt = $758.48, cashFlow = $3,162.22, coc = 7.905551%. Source: Mortgage calculator, Wikipedia (monthly payment c = rP ÷ (1 − (1 + r)^−N) for principal P, monthly rate r and N payments), https://en.wikipedia.org/wiki/Mortgage_calculator (retrieved 2026-10-02); IRS, Publication 527 (2025), Residential Rental Property (rental income and rental expenses such as insurance, property taxes, repairs and maintenance, management fees and mortgage interest), https://www.irs.gov/publications/p527 (retrieved 2026-10-02).

## FAQ

### What is cash on cash return?

The yearly before-tax cash flow of a property divided by the cash you invested in it, as a percent. It tells you what your own money earns each year, after the loan is paid.

### How do I calculate cash on cash return?

Take the rent for the year, less vacancy and operating expenses, less the loan payments: that is the annual cash flow. Divide by your cash invested (down payment, closing costs, repairs) and multiply by 100. $36,000 of cash flow on $300,000 invested is 12%.

### What is a good cash on cash return?

There is no single good number. Compare it with what the same cash would earn elsewhere, such as a savings account or bonds, and with the risk and work of owning the rental. A higher loan raises the return on your cash but also the risk.

### How is it different from the cap rate?

The cap rate is net operating income ÷ the price, as if you paid all cash, so it ignores the loan. Cash on cash return counts the loan payments and only the cash you put in. With no loan and no closing costs, the two are equal.

### Are loan payments an operating expense?

No. Operating expenses are the costs of running the property: taxes, insurance, repairs and maintenance, management and utilities. Loan payments come off after net operating income, so this page asks for them separately.

### Does cash on cash return include taxes?

No, it is a before-tax measure. Income tax, depreciation and the tax deduction for mortgage interest are left out. IRS Publication 527 explains how rental income and expenses are taxed.

## Sources

- Cash on cash return, Wikipedia (the ratio of annual before-tax cash flow to the total amount of cash invested, expressed as a percentage; worked example: $300,000 down, $5,000 a month after expenses, $2,000 a month of mortgage payments, $36,000 ÷ $300,000 = 12%). https://en.wikipedia.org/wiki/Cash_on_cash_return (retrieved 2026-10-02)
- IRS, Publication 527 (2025), Residential Rental Property (rental income and expenses: advertising, cleaning and maintenance, insurance, mortgage interest, property taxes, repairs, utilities, management fees, depreciation). https://www.irs.gov/publications/p527 (retrieved 2026-10-02)
- Mortgage calculator, Wikipedia (the fixed monthly payment c = rP ÷ (1 − (1 + r)^−N) for a loan P at monthly rate r over N payments). https://en.wikipedia.org/wiki/Mortgage_calculator (retrieved 2026-10-02)