Cash-on-Cash Return Calculator
The annual cash yield you actually pocket after debt service, op-ex, and vacancy. Cap rate's leveraged cousin — what serious investors track.
Negative cash flow at these inputs — the property bleeds cash each month at this rate.
Have a question about this calculation?
Type a question — the AI sees your numbers above and answers specifically about your scenario. First 3 questions free, then a quick sign-in to keep going (still free).
Cap rate ignores leverage. Cash-on-cash doesn't.
Cash-on-cash return (CoC) is the cash flow a property generates divided by the cash you put in. Unlike cap rate, it accounts for financing — if you borrow 80%, your CoC could be 12% on a property with a 6% cap rate because your $90K down is doing the work of a $450K asset.
Most investors graduate from cap rate to CoC once they have one or two properties under their belt. Cap rate tells you which properties are worth a second look; CoC tells you which financing structure makes the most sense for a given property.
CoC also reveals when leverage hurts. If rates rise faster than rents grow, the same property can have a great cap rate but a negative cash-on-cash — you're bleeding cash every month even though the building is profitable on paper. Our calculator flags this as DIFFICULT in the AI verdict.
- Annual rent: $36,000
- Op-ex (30%): −$10,800
- NOI: $25,200
- Annual debt service (P&I × 12): −$26,929
- Annual cash flow: −$1,729
- Cash in (20% down + $8K closing): $98,000
- Cash-on-cash: −1.76% (DIFFICULT)
8% used to be the floor for serious income investors. In 2026 with high interest rates, 5–7% is now realistic in most markets; anything above 8% usually requires the BRRRR strategy or extremely high-rent markets. Below 3% you're basically betting on appreciation, which is a different game.
Both, for different things. Cap rate is your screening tool when you're scanning 50 listings: it filters out properties that don't cash-flow at any reasonable leverage. CoC is your decision tool once you've narrowed to 3 candidates: it tells you which financing structure (and down payment %) optimizes your return.
No. CoC is a pre-tax cash yield only. It excludes principal paydown (you're building equity but not pocketing it), appreciation, depreciation tax shield, and any value-add work. That's why BRRRR investors also track IRR — internal rate of return — which captures the full picture but is harder to compute on a napkin.
CoC drives the PASS / STRETCH / DIFFICULT call: above 3% is PASS, 0–3% is STRETCH, negative is DIFFICULT. The AI then runs 3 what-if scenarios (rate +1pt, rent −10%, vacancy 15%) and recomputes CoC for each — so you see whether your "PASS" survives realistic stress, or whether it crumbles when the lease comes up for renewal.