Cash-on-Cash Return Calculator

Calculate cash-on-cash return for rental property investments. Compare to stock market returns.

By Konstantin Iakovlev · Updated April 2026 · Source: CFPB — Owning a Home

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Cash-on-Cash Return

16.44%

Monthly Cash Flow

$1,000.00

Rating

Excellent

Cash-on-Cash Breakdown

Down Payment$60,000.00
Closing Costs$8,000.00
Repairs / Rehab$5,000.00
Total Cash Invested$73,000.00
Annual Cash Flow$12,000.00
Cash-on-Cash Return16.44%
Monthly Cash Flow$1,000.00

How Does This Compare?

S&P 500 average annual return: ~10% | Real estate CoC target: 8-12% | High-yield savings: ~4-5%

Use the Cash-on-Cash Return Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Cash-on-cash return measures the profitability of a rental property against the actual cash you put into it. For real estate investors, the appeal is that it isolates the annual return on your own money down, which makes it easy to weigh a property against other places that money could go. With projected stock market returns around 8.5% for 2026, knowing where your property lands gives that comparison real teeth.

The calculation divides annual pre-tax cash flow by total cash invested. Pre-tax cash flow starts with annual rental income, then subtracts operating expenses such as property taxes, insurance, and maintenance, along with annual mortgage payments. Total cash invested pulls together your down payment, closing costs, and any upfront renovation spending.

Two limits are worth keeping in view: this figure tracks cash flow alone and leaves out property appreciation and tax benefits, both of which can move overall returns considerably. Investors often understate their numbers by leaving out initial outlays, like repairs done before a tenant moves in, so account for every dollar spent up front and build in a buffer for the expenses you can't yet see.

Example: Investing in a Rental Property

  1. 1 Step 1: Input your initial investment. Let's say you put down a $50,000 down payment, paid $5,000 in closing costs, and spent $10,000 on initial renovations. Your total cash invested is $65,000.
  2. 2 Step 2: Calculate your annual cash flow. Your annual rental income is $24,000 ($2,000/month). Annual operating expenses (taxes, insurance, maintenance) are $6,000, and your annual mortgage payments are $12,000. Your annual pre-tax cash flow is $24,000 - $6,000 - $12,000 = $6,000.
  3. 3 Step 3: The calculator determines your Cash-on-Cash Return. Divide your annual cash flow of $6,000 by your total cash invested of $65,000. Your Cash-on-Cash Return is approximately 9.23%.
  4. 4 Step 4: Compare this return. A 9.23% Cash-on-Cash Return for 2026 looks favorable when compared to the projected 8.5% average stock market return, suggesting this rental property could be a strong investment. However, remember to factor in potential vacancies and unexpected repairs not accounted for in this simplified calculation.

Source: CFPB — Owning a Home · Last updated: April 2026

Frequently Asked Questions

What is a good cash-on-cash return for rental property?
Most real estate investors target 8-12% cash-on-cash return. Anything above 10% is considered strong in 2026 given current mortgage rates. Below 5% may not justify the effort and risk compared to passive index fund investing.
How is cash-on-cash return different from cap rate?
Cash-on-cash return measures the return on your actual cash invested (factoring in mortgage leverage), while cap rate measures the return on the total property value as if you paid all cash. Cash-on-cash is more relevant for leveraged investors.
Does cash-on-cash return include appreciation?
No. Cash-on-cash return only measures annual pre-tax cash flow divided by total cash invested. It does not account for property appreciation, equity buildup from mortgage paydown, or tax benefits. Use a total ROI calculator for the complete picture.

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