Free calculator
Cash-on-cash return calculator
Cash-on-cash return is the yearly cash a rental puts in your pocket divided by the cash you put into it. Both halves are easy to get wrong. This calculator counts the closing costs and make-ready work in the cash invested, and vacancy, repairs, CapEx and management in the cash flow.
Cash-on-cash return
2.4%
What would make this a Good deal?
- At $228,500 this becomes Good.
- At $2,440 rent this becomes Good.
Cash flow per year
$1,974
Cash invested
$83,131
Down payment
$62,500
Closing and loan costs
$15,131
Make-ready with contingency
$5,500
Cap rate
7.3%
Sets aside 5% vacancy, 5% repairs, 5% CapEx and 8% management. Property tax uses a state default rate; insurance $105 a month. Closing and loan costs use state defaults. Rates are illustrative.
Comps, rehab, refi and a verdict for a real address. Your numbers come with you.
How to use it
Enter price, rent and make-ready
Make-ready is work before the first tenant. A 10% contingency is added.
Pick the loan
DSCR, conventional or all cash, with your down payment and rate.
Read the return
As a planning default the app calls 8% or more Good and 5% to 8% Marginal for a long-term rental.
Free here, deeper in the app
This free calculator
- Cash-on-cash return with every cost counted
- Cash invested, split into down payment, closing and loan costs, and repairs
- Annual cash flow after the loan and reserves
- Cap rate, and the price or rent that would make it Good
Run The Deal app
- A five-year hold with paydown, appreciation and IRR
- BRRRR math, where cash-on-cash can go infinite
- Rent comps and a HUD fair market rent check
- Your own expense defaults on every deal
A worked example
- Price
- $250,000
- Rent
- $2,200 a month
- Down payment, 25%
- $62,500
- Closing and loan costs
- About $15,100
- Make-ready with contingency
- $5,500
Cash flow is thin after vacancy, repairs, CapEx, management, tax, insurance and a 7% loan. The calculator shows the price or rent that would make it Good.
Cash-on-cash is one year's cash. It leaves out loan paydown, appreciation and tax benefits. For the whole picture over a hold, use IRR. For a BRRRR, where the refi can return all your cash, try the BRRRR calculator.
Questions
How do you calculate cash-on-cash return?
Annual pre-tax cash flow divided by total cash invested. If a rental nets $4,800 a year and you put in $60,000, cash-on-cash is 8%.
What counts as cash invested?
Your down payment, buy closing costs, loan costs and the repairs you pay for before it rents. Leaving any of these out makes the return look better than it is.
What is a good cash-on-cash return?
It depends on your goals and market. As a planning default the app scores 8% or more as good for a long-term rental. Appreciation and loan paydown are not in cash-on-cash; see IRR for the full return.
Cash-on-cash or cap rate?
Cap rate ignores the loan and compares properties. Cash-on-cash includes the loan and measures your own money. Use both.
Learn the terms
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