Cash-on-Cash Return Calculator

Cash-on-Cash Return is evaluated from Annual Rental Income, Vacancy Loss and Total Annual Expenses. The calculation reports Effective Gross Income, Annual Pre-Tax Cash Flow and Monthly Cash Flow.

Results

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About the Cash-on-Cash Return Calculator

Cash-on-Cash Return is treated here as a quantitative relation between Annual Rental Income, Vacancy Loss, Total Annual Expenses and Annual Mortgage Payment and Effective Gross Income, Annual Pre-Tax Cash Flow, Monthly Cash Flow and Total Cash Invested.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
Annual cash flow deducts all expenses including mortgage from rental income. CoC divides that cash flow by your actual out-of-pocket investment. Higher leverage = higher CoC potential (if property cash flows) but also higher risk.

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

Annual cash flow deducts all expenses including mortgage from rental income. CoC divides that cash flow by your actual out-of-pocket investment. Higher leverage = higher CoC potential (if property cash flows) but also higher risk.

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Phoenix SFR rental: $300K purchase, 20% down, $2,400/month rent

Inputs

annual_rental_income: 28800 annual_vacancy: 1440 annual_expenses: 7200 annual_debt_service: 14400 down_payment: 60000 closing_costs: 5000
Effective Gross Income: $27,360. Annual Pre-Tax Cash Flow: $5,760. Monthly Cash Flow: $480. Total Cash Invested: $65,000. Cash-on-Cash Return: 8.86%. CoC Assessment: Good (7-10%)

With Annual Rental Income = 28,800, Vacancy Loss = 1,440, Total Annual Expenses = 7,200 and Annual Mortgage Payment = 14,400 as the stated inputs, the result is Effective Gross Income = $27,360, Annual Pre-Tax Cash Flow = $5,760 and Monthly Cash Flow = $480. Each value corresponds to the declared output fields.

Example 2: Chicago 2-flat: $425K, $2,200 + $1,800/month units, 25% down

Inputs

annual_rental_income: 48000 annual_vacancy: 2400 annual_expenses: 14400 annual_debt_service: 21600 down_payment: 106250 closing_costs: 8000
Effective Gross Income: $45,600. Annual Pre-Tax Cash Flow: $9,600. Monthly Cash Flow: $800. Total Cash Invested: $114,250. Cash-on-Cash Return: 8.4%. CoC Assessment: Good (7-10%)

With Annual Rental Income = 48,000, Vacancy Loss = 2,400, Total Annual Expenses = 14,400 and Annual Mortgage Payment = 21,600 as the stated inputs, the result is Effective Gross Income = $45,600, Annual Pre-Tax Cash Flow = $9,600 and Monthly Cash Flow = $800. Each value corresponds to the declared output fields.

Example 3: No-mortgage all-cash deal: $180K rural property, $1,500/month rent

Inputs

annual_rental_income: 18000 annual_vacancy: 900 annual_expenses: 5400 annual_debt_service: 0 down_payment: 180000 closing_costs: 3000
Effective Gross Income: $17,100. Annual Pre-Tax Cash Flow: $11,700. Monthly Cash Flow: $975. Total Cash Invested: $183,000. Cash-on-Cash Return: 6.39%. CoC Assessment: Acceptable (5-7%)

With Annual Rental Income = 18,000, Vacancy Loss = 900, Total Annual Expenses = 5,400 and Annual Mortgage Payment = 0 as the stated inputs, the result is Effective Gross Income = $17,100, Annual Pre-Tax Cash Flow = $11,700 and Monthly Cash Flow = $975. Each value corresponds to the declared output fields.

Example 4: Negative cash flow: speculation play, LA market

Inputs

annual_rental_income: 36000 annual_vacancy: 1800 annual_expenses: 9600 annual_debt_service: 33600 down_payment: 175000 closing_costs: 15000
Effective Gross Income: $34,200. Annual Pre-Tax Cash Flow: $9,000. Monthly Cash Flow: $750. Total Cash Invested: $190,000. Cash-on-Cash Return: -4.74%. CoC Assessment: Negative Cash Flow - Reassess

With Annual Rental Income = 36,000, Vacancy Loss = 1,800, Total Annual Expenses = 9,600 and Annual Mortgage Payment = 33,600 as the stated inputs, the result is Effective Gross Income = $34,200, Annual Pre-Tax Cash Flow = $9,000 and Monthly Cash Flow = $750. Each value corresponds to the declared output fields.

Common Use Cases

  • Calculate cash-on-cash return for rental property
  • Compare leveraged vs unleveraged real estate returns
  • Evaluate actual return on down payment and closing costs