Cash on Cash Return Calculator: Maximize Your Real Estate ROI
Cash-on-cash return shows how much annual cash flow you earn for every dollar you invested; seasoned landlords aim for 8-12 % to beat inflation and financing costs (BiggerPockets, 2022).
Cash on Cash Return Calculator
Cash on Cash Return:
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How to use the tool
Enter Rental Income. Type the monthly rent, e.g., $2 450 or $3 150.
Add Other Income. Include parking, laundry, etc.—try $90 or $220.
Fill in Operating Expenses. Input monthly costs such as taxes and maintenance, e.g., $920 or $1 150.
Input Cash Investment. Combine down payment, closing and rehab—sample figures: $82 000 or $115 000.
Press “Calculate”. The tool returns your cash-on-cash percentage instantly.
30-year fixed mortgage rate: 6.72 % in May 2024 (Freddie Mac PMMS).
FAQ
What is cash-on-cash return?
Cash-on-cash return measures annual pre-tax cash flow divided by the total cash you invested. It isolates immediate liquidity rather than long-term appreciation (Investor.gov, 2023).
How do I calculate annual NOI?
Add twelve months of rent and ancillary income, subtract twelve months of operating expenses. The formula excludes mortgage principal and depreciation (IRS Pub 527, 2023).
What is a “good” percentage?
Most investors target 8–12 % to outpace financing costs and inflation (BiggerPockets, 2022). High-risk areas may demand 15 % or more for safety.
Can cash-on-cash return be negative?
Yes. If expenses and vacancy push NOI below zero, CoC turns negative, signalling a cash-bleeding asset that needs renegotiation or exit (HUD, 2023).
How does leverage affect CoC?
Borrowing lowers the cash you put in, so the same cash flow yields a higher percentage return—until debt service rises faster than income (Fannie Mae Multifamily, 2023).
How often should I recalculate?
Update figures annually and after rent changes, refinancing, or major repairs to keep projections aligned with reality (NAR Investor Report, 2024).
Is CoC the same as cap rate?
No. Cap rate divides NOI by purchase price, assuming an all-cash deal. CoC divides NOI by your actual cash outlay, reflecting financing (CCIM Institute, 2023).
How can I improve my CoC?
Boost revenue (raise rents, add storage), trim controllable expenses, or refinance to release trapped equity—each increases NOI or lowers cash basis (Freddie Mac Multifamily, 2023). “Operating expenses generally range between thirty-five and forty-five percent of effective gross income” (HUD, 2023).
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