Cash-on-cash return calculator
Enter the price, down payment, closing and rehab costs, the loan, and the rent and expenses. See the first-year cash flow after debt service and what it returns on the cash you invested.
Estimate of the first year, before income taxes. It leaves out loan paydown, appreciation and tax effects, which a full return analysis would include. Rents, vacancy and costs are your assumptions; check them against the market.
Cash-on-cash return is annual pre-tax cash flow divided by total cash invested. Cash flow is NOI minus the year's loan payments; cash invested is the down payment, closing costs and rehab. A $300,000 rental with 25% down, $16,000 of other costs, $19,920 of NOI and a 7% loan returns $1,956.83, or 2.15%.
How to use the cash-on-cash return calculator
Enter the purchase
Price, down payment, closing costs, rehab and any other upfront cash.
Add the loan
Interest rate and term; set the down payment to 100% for a cash purchase.
Add rent and expenses
Rent, vacancy and operating costs give the NOI, then the return.
What the cash-on-cash return calculator covers
Cash-on-cash return
First-year pre-tax cash flow as a percentage of the cash you put in.
Loan payment built in
Standard fixed-rate principal and interest on the amount financed.
Cap rate and DSCR
The unlevered cap rate and the debt service coverage ratio alongside.
Monthly cash flow
What the property nets each month after the loan payment.
Cash purchases
Put 100% down to see the return with no loan.
- Formula
- Cash-on-cash = (NOI − annual debt service) ÷ (down payment + closing costs + rehab + other)
- Debt service
- 12 × P&I, P&I = L × r ÷ (1 − (1 + r)^−n)
- Leaves out
- Loan paydown, appreciation, depreciation and income taxes
- Cost and privacy
- Free, no sign-up; runs in your browser
Questions about the cash-on-cash return calculator
How do you calculate cash-on-cash return?
Subtract a year of loan payments from the property's net operating income, then divide by the cash you invested. $19,920 of NOI minus $17,963.17 of payments is $1,956.83; on $91,000 invested that's 2.15%.
What's the difference between cash-on-cash return and cap rate?
Cap rate ignores financing: it's NOI divided by the price. Cash-on-cash return includes the loan, so it shows the return on your own cash. Leverage can push it above or below the cap rate.
What counts as cash invested?
Everything you pay out of pocket to buy and ready the property: down payment, closing costs, repairs and renovation, and any reserves or furnishing you fund up front.
What is DSCR?
Debt service coverage ratio is NOI divided by the year's loan payments. A ratio above 1.0 means the property's income covers the loan; lenders on investment loans set their own minimums.
Is cash-on-cash return the whole return?
No. It's the first year's cash yield before taxes. It leaves out principal paydown, appreciation and tax effects, which a full analysis would add.
Can Closingbird help on investment purchases?
Yes. Closingbird tracks every deadline, document and party on the purchase, and reminds each deadline owner before the date, whether the buyer lives there or rents it out.
Guides and features for this step of the deal
Where the rules come from
Let Closingbird keep every date for you
Closingbird reads the executed contract, fills in every deadline, party and amount, and reminds each deadline owner before the date. Calendar or business days, with weekends and US federal holidays skipped.
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