Cash on Cash ROI Calculator
Cash-on-cash return shows the actual cash return on cash invested. Essential for leveraged real estate deals where traditional ROI doesn’t tell the whole story.
How the Cash on Cash ROI Calculator works
Input property price, down payment, closing costs, annual rental income, and operating expenses. Calculate cash-on-cash return, monthly cash flow, and comparison to market returns.
When you use leverage, total ROI can be misleading. Cash-on-cash return shows what you’re actually earning on your invested dollars, the metric that matters for financial independence.
How it works
Tutorial
Cash-on-cash return reveals the actual cash yield on money you personally invested, making it the most important metric for leveraged real estate deals. While total ROI can look impressive, cash-on-cash shows what’s really happening with the dollars that came from your pocket.
You have two options: use the calculator above to analyze leveraged investments with financing included, or follow this guide to manually calculate cash-on-cash returns.
The Formula
| Component | Formula |
|---|---|
| Total Cash Invested | Down Payment + Closing Costs + Repairs |
| Annual Cash Flow | Rental Income – All Expenses – Debt Service |
| Cash-on-Cash Return | (Annual Cash Flow ÷ Total Cash Invested) × 100 |
Step-by-Step Calculation
Let’s analyze a leveraged property investment.
Step 1: Calculate Total Cash Invested
Add up only the cash you actually put in:
| Expense | Amount |
|---|---|
| Down Payment (20%) | $50,000 |
| Closing Costs | $7,500 |
| Initial Repairs | $8,500 |
| Total Cash Invested | $66,000 |
Calculation: $50,000 + $7,500 + $8,500 = $66,000
Step 2: Calculate Annual Cash Flow
Determine actual cash remaining after all payments:
| Item | Amount |
|---|---|
| Annual Rental Income | $30,000 |
| Operating Expenses | -$9,000 |
| Mortgage Payments | -$14,400 |
| Annual Cash Flow | $6,600 |
Calculation: $30,000 – $9,000 – $14,400 = $6,600
Step 3: Calculate Cash-on-Cash Return
Divide annual cash flow by cash invested:
| Step | Calculation | Result |
|---|---|---|
| Divide cash flow by investment | $6,600 ÷ $66,000 | 0.10 |
| Convert to percentage | 0.10 × 100 | 10.00% |
Final Answer: Your cash-on-cash return is 10.00%
What This Means
A 10% cash-on-cash return means you’re earning $10 in annual cash flow for every $100 you invested. This is your actual spendable return, the cash hitting your bank account each year, which is what really matters for building wealth through real estate.
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