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Updated 2026-04-20 · Real Estate · Educational use only ·

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Cash-on-Cash Return Calculator

Real estate cash flow yield.

Calculate cash-on-cash return for a real estate investment — annual pre-tax cash flow divided by cash actually invested into the deal.

What this tool does

Cash-on-cash return measures annual pre-tax cash flow as a percentage of the actual cash invested into a property deal. This calculator divides your annual pre-tax cash flow by your total cash invested and expresses the result as a percentage. The output shows how much cash income you generate each year relative to the capital you put in—a metric that accounts for leverage because it reflects only the portion of the deal funded with your own money, not the full property value. Annual cash flow is the primary driver of the result; changes in either the cash flow figure or your initial investment amount will shift the percentage significantly. Property investors often use this calculation to compare the cash returns across different deals or financing structures. The calculator assumes cash flows remain stable year-over-year and does not account for property appreciation, operating expense changes, loan paydown, taxes, or transaction costs. Results are for educational illustration only.

Quick answer: with the default values, the result is 10.00% (Cash-on-Cash Return). Adjust the values below for your own figures.

Enter Values

Currency($)

Annual Pre-Tax Cash Flow($)

Total Cash Invested($)

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Formula Used

C o C = \frac{A nn u a l C a s h F l o w}{C a s h I n v es t e d} \times 100

C o C

Cash-on-cash return %

A nn u a l C a s h F l o w

Pre-tax annual cash flow

C a s h I n v es t e d

Out-of-pocket cash

Disclaimer

Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.

Cash-on-cash return measures annual cash flow as % of cash invested - the bedrock metric of real estate investing. Formula: annual pre-tax cash flow / total cash invested × 100. 8,000 annual cash flow on 80,000 cash invested = 10% CoC. Used to compare property deals on equal footing regardless of leverage or financing structure.

Example: 400,000 property, 25% deposit = 100,000 cash invested (plus 5,000 closing). Annual rent 24,000, mortgage 18,000, expenses 5,000. Annual cash flow = 24,000 - 18,000 - 5,000 = 1,000. CoC = 1,000 / 105,000 = 0.95%. A low return at 0.95%; the main levers here are operating expenses, rent level, and purchase price.

Benchmarks: 4-6% CoC = average market deal, 8-12% CoC = good deal, 15%+ = exceptional (often indicates higher risk or value-add opportunity). CoC ignores: appreciation, principal paydown, tax benefits. Total return often double the CoC after these factors. Use CoC for cash flow analysis, IRR for total return analysis. Both important for full picture.

A worked example

With the defaults: annual pre-tax cash flow of 8,000, total cash invested of 80,000. The tool returns 10.00%.

What moves the number most

The result responds to Annual Pre-Tax Cash Flow and Total Cash Invested.

The formula behind this

CoC = annual pre-tax cash flow / total cash invested × 100.

Where this fits in planning

This is a "what-if" tool, not a forecast. It helps to test ideas: what happens if one of the inputs comes in higher or lower than you first assumed. The value is in the scenarios you run, not the single answer you get from the defaults.

Example Scenario

£8,000 / £80,000 = 10.00% CoC return.

Inputs

Annual Pre-Tax Cash Flow:£8,000

Total Cash Invested:£80,000

Expected Result10.00%

Expected Result breakdown
Annual Cash Flow	$8,000.00
Monthly Cash Flow	$666.67
Cash Invested	$80,000.00
Payback (years)	10.0
Rating	Good

This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.

Sources & Methodology

Methodology

This calculator computes cash-on-cash return by dividing the annual pre-tax cash flow generated by a property investment by the total cash invested in that property, then expressing the result as a percentage. The metric measures the yield on actual cash deployed in a given year, treating both the numerator and denominator as fixed values for that period. The calculation assumes a constant annual cash flow and does not account for changes in property value, mortgage principal paydown, financing costs, operating expenses, vacancy rates, capital expenditures, or tax liability. Cash-on-cash return is a snapshot measure of current-year cash return relative to initial equity and complements but does not replace longer-term return metrics such as internal rate of return or appreciation analysis.

References

Frequently Asked Questions

What's a good CoC return?

Commonly cited benchmarks describe cash-on-cash return ranges as follows: below 4% sits at the lower end of the typical range (often negative real return after inflation); 4-6% is an average market deal; 6-8% is in the typical range; 8-12% is in the higher end of typical; 12%+ is exceptional (or carries higher risk). Returns vary heavily by market — low cap-rate cities have lower CoC, cash-flow markets often 8%+. The applicable range depends on market type, cap-rate environment, financing structure, and property condition.

CoC vs cap rate vs ROI?

Cap rate: NOI / property value (unleveraged yield). CoC: annual cash flow / cash invested (leveraged yield). ROI: total return including appreciation. Same property has different metrics depending on leverage. CoC measures only cash flow returns - ignores capital appreciation and principal paydown. All three together give a fuller picture.

What CoC ignores?

(1) Capital appreciation (often 3-5% annually long-term), (2) Mortgage principal paydown (builds equity each month), (3) Tax benefits (depreciation, deductions). Adding these typically doubles the apparent return. 8k cash flow + 4k principal paydown + 6k appreciation on 80k invested = 22.5% total return vs 10% CoC.

Negative CoC - sell or hold?

Negative cash flow means the property costs money each month. Investors weighing whether to hold typically consider the appreciation outlook (for example a gentrifying area), whether tax benefits offset the losses, and whether rents are likely to rise faster than costs. Where those factors are weak, the ongoing shortfall is harder to justify. Some investors set a checkpoint - for example a target of positive cash flow within a set period - to review the position.

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