CAPRATE

Cash on Cash Return Calculator

See what your invested cash earns each year — after the mortgage — live as you type.

Instant Results

Illustrative example — edit any input to use your own assumptions.

Purchase & Cash In
$
%
$
Loan & Income
%
$
Don't know your NOI? Calculate it first

Estimates only — first-year, pre-tax figures. Not financial advice.

Your Cash on Cash Return
9.64%

Illustrative result from the example inputs above.

Annual, pre-tax

Total Cash Invested
$135,000.00
Annual Debt Service
$26,979.72
Annual Pre-Tax Cash Flow
$13,020.28
Cap Rate (Same Deal)
8.00%
Mortgage Constant
7.19%
Acquisition-Cost Drag
0.78%
%

Calculation flow

Purchase Price $500,000.00 − Loan Amount $375,000.00 → Down Payment Cash $125,000.00

Down Payment Cash $125,000.00 + Upfront Costs $10,000.00 → Total Cash Invested $135,000.00

Annual NOI $40,000.00 − Annual Debt Service $26,979.72 → Annual Pre-Tax Cash Flow $13,020.28

Annual Pre-Tax Cash Flow $13,020.28 ÷ Total Cash Invested $135,000.00 → Cash on Cash Return 9.64%

Sharing includes your financial inputs in the link. Anyone with the link can see them.

About sharing

Sharing creates a link with the financial numbers entered here. Anyone with the link can see them; it contains no address, identity information, server-stored data, or server-side analysis records.

What is a good cash on cash return? A screening context, not a rating

A common answer to “what is a good cash on cash return” is the 8–12% screening rule of thumb — not a pass/fail grade. Rocket Mortgage updated that guide on August 26, 2025 and calls the range a general industry consensus, while noting market, property size, and property type still move the goalposts. The table only labels the arithmetic under your assumptions. It is not a city, asset-class, or loan benchmark — and not a forecast, recommendation, or substitute for due diligence.

ResultWhat the arithmetic saysWhat it does not say
Below 0%Annual pre-tax cash flow is negative under the entered inputs.It does not forecast future cash flow or prescribe a decision.
0%–8%Cash flow is positive, but the return sits below the cited rule of thumb.It does not account for local conditions, timing, property type, or risk.
8%–12%The result falls inside the cited general investment-property screening range.It is not an Excellent rating, recommendation, or transaction forecast.
Above 12%The calculation is above the cited rule of thumb under these assumptions.The number alone does not explain risk, sustainability, or whether to proceed.

What changes when financing changes?

Three illustrative paths, same calculator math. Load one, read every input and output, then replace it with the deal records.

Illustrative examples only — not listings, borrower terms, market averages, or investment advice.

Favorable financing

25% down, 5% fixed rate, 30-year amortization on a $500,000 purchase with $40,000 NOI.

Purchase Price
$500,000.00
Down Payment
25.00%
Closing & Upfront Costs
$10,000.00
Interest Rate
5.00%
Amortization Period (Years)
30 years
Annual NOI
$40,000.00
Loan Amount
$375,000.00
Total Cash Invested
$135,000.00
Annual Debt Service
$24,156.96
Annual Pre-Tax Cash Flow
$15,843.04
Your Cash on Cash Return
11.74%
Cap Rate (Same Deal)
8.00%
Mortgage Constant
6.44%
  • The 6.44% mortgage constant sits below the 8.00% cap rate, so the loan payment factor leaves cash flow after debt service.
  • Rehearse a deal where financing lifts first-year cash on cash return without changing the property's cap rate.
  • Compare mortgage constant with cap rate, then count both down payment and acquisition costs in cash invested.
  • Not a rate quote, listing, or proof that a loan will be available on these terms.

Near-break-even financing

20% down, $15,000 upfront costs, 7.5% fixed rate, and 30-year amortization on the same $500,000 purchase with $35,000 NOI.

Purchase Price
$500,000.00
Down Payment
20.00%
Closing & Upfront Costs
$15,000.00
Interest Rate
7.50%
Amortization Period (Years)
30 years
Annual NOI
$35,000.00
Loan Amount
$400,000.00
Total Cash Invested
$115,000.00
Annual Debt Service
$33,562.32
Annual Pre-Tax Cash Flow
$1,437.68
Your Cash on Cash Return
1.25%
Cap Rate (Same Deal)
7.00%
Mortgage Constant
8.39%
  • The 8.39% mortgage constant exceeds the 7.00% cap rate, leaving only a thin first-year cash flow after debt service.
  • Stress-test how financing and operating assumptions can leave little pre-tax cash flow.
  • A weak result is not the nominal interest rate alone — loan size, amortization, NOI, down payment, and upfront costs all move it.
  • Does not forecast refinancing, rent growth, vacancy, expenses, taxes, or a real borrower's terms.

All-cash purchase

A $500,000 purchase paid in cash with $10,000 upfront costs and $40,000 NOI.

Purchase Price
$500,000.00
Down Payment
100.00%
Closing & Upfront Costs
$10,000.00
Interest Rate
0.00%
Amortization Period (Years)
30 years
Annual NOI
$40,000.00
Loan Amount
$0.00
Total Cash Invested
$510,000.00
Annual Debt Service
$0.00
Annual Pre-Tax Cash Flow
$40,000.00
Your Cash on Cash Return
7.84%
Cap Rate (Same Deal)
8.00%
Mortgage Constant
Not applicable
  • With no debt service, cash flow equals NOI; the $10,000 upfront costs pull cash on cash return to 7.84%, below the 8.00% cap rate.
  • Isolate the property's unleveraged yield from the cash you actually put in.
  • All-cash does not make cash-on-cash return automatically equal cap rate when acquisition costs remain in the denominator.
  • Excludes taxes, appreciation, reserves, and holding-period cash flows.

What cash on cash return actually measures (and what it skips)

Cash on cash return answers one question: of the cash you put into the deal, how much comes back each year as pre-tax cash flow? It is also called cash yield. Cap rate ignores your loan; this number does not. This tool estimates illustrative Year 1 cash on cash return. It subtracts annual principal-and-interest debt service from NOI, then divides by total cash invested — down payment plus the upfront costs you enter, including closing costs, loan points, and initial repairs or flip rehab cash. It is an annual metric, not Year-1-only math. This page uses Year 1 because its inputs are a single annual NOI and a fixed annual debt-service estimate. Recalculate with each year's actual or forecast inputs when the holding period matters.

  • Cash flow after the mortgage — not just the property's unleveraged yield
  • Upfront costs sit in the denominator, so closing and flip rehab cash change the percentage
  • Cap rate sits beside the result so you can see when financing helps or hurts
Loan convention
Fixed-rate, fully amortizing principal-and-interest loan. It excludes adjustable-rate, interest-only, balloon, seller-financed, and escrow-payment structures.
Included and excluded
Counts the down payment and upfront costs you enter. Skips appreciation, sale proceeds, loan paydown as a return, income tax, and any costs left out of NOI or upfront costs.
Use with records
Check rent, operating expenses, reserves, taxes, insurance, closing costs, and loan terms against property and lender records before you compare or act.

Cap rate stays beside the result as a property-yield reference. For the different questions each metric answers, see the Cap Rate vs Cash on Cash guide.

Want the default numbers broken down?

Use the calculator defaults — the figures already on the first screen. A $500,000 purchase at 25% down plus $10,000 upfront costs means $135,000 total cash invested. At 6% for 30 years, annual debt service is about $26,980. Subtract that from $40,000 NOI and annual pre-tax cash flow is $13,020 — a 9.64% cash on cash return, against an 8.00% cap rate on the same deal. When the rehearsal is clear, swap every figure for the deal records.

How do I calculate cash on cash return here?

  1. 1

    Enter purchase price and cash in

    Start with purchase price, down payment percent, and closing or upfront costs — including loan points and initial repairs or flip rehab cash. Set down payment to 100% for an all-cash purchase.

  2. 2

    Add loan terms and annual NOI

    Enter the fixed interest rate, amortization years, and annual NOI. NOI is rent and other income minus operating expenses, before loan payments. Missing NOI? Run the NOI calculator first.

  3. 3

    Read cash on cash return (and cap rate)

    The percentage updates as you type, with total cash invested, annual debt service, and pre-tax cash flow underneath. Cap rate for the same deal sits beside it so financing changes are visible.

Frequently Asked Questions

What does cash on cash return measure?
It measures annual pre-tax cash flow against the cash you put into the deal. Some guides also call this cash yield. This calculator uses annual NOI minus annual principal-and-interest debt service, divided by the down payment and upfront costs entered.
What is a good cash on cash return?
Many guides cite about 8–12% as a screening range — not a universal target. Whether 10% is “good” still depends on market, property type, leverage, and risk. Use the calculator with local comps and the screening table on this page, not as a pass/fail rating.
What does a 5% cash on cash return mean?
Each $1 of cash you put in returns about $0.05 of annual pre-tax cash flow under these assumptions. Example: $6,750 cash flow on $135,000 invested is 5%. The figure alone does not say whether to buy.
Is cash on cash return only for Year 1?
No — it is an annual metric you can recalculate for any year. This tool estimates illustrative Year 1 because it takes one NOI and fixed debt-service inputs; use each year's actual or forecast numbers later.
Does cash on cash return include mortgage payments?
Yes in the cash-flow numerator: annual debt service comes out of NOI before dividing. Mortgage principal is not added to total cash invested — only the down payment and the upfront costs you enter sit in the denominator.
What counts as total cash invested?
Down payment cash plus the closing and upfront costs you enter — including loan points and initial repairs or flip rehab cash paid out of pocket. Leave a cost out of those fields and the percentage changes.
What is the difference between cash on cash return and ROI?
Cash on cash return looks at annual pre-tax cash flow versus cash invested in that period. ROI usually covers a fuller holding-period picture — sale proceeds, equity build, and sometimes taxes — so the two answers are not interchangeable.
Why is cap rate shown with cash on cash return?
Cap rate is a property-yield reference: NOI and price before financing. Cash on cash return also reflects the loan payment and cash invested, so it moves when financing changes. For a fuller comparison, see the Cap Rate vs Cash on Cash guide.
Does cash on cash return include equity or appreciation?
No. This calculator does not count appreciation, sale proceeds, or loan paydown as a return. Those belong in equity or IRR-style analysis over a holding period. Income taxes sit outside this formula too.

What question do you have next?

Rebuild NOI when the income input is soft. Compare cap rate with cash on cash when you are choosing the metric. Check DSCR when the next question is loan coverage.

Calculate NOICompare cap rate and cash on cashCheck DSCR