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.
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Formula Used
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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%. Poor return - either reduce expenses, raise rent, or pass on the deal.
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%. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Annual Pre-Tax Cash Flow and Total Cash Invested. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
The formula behind this
CoC = annual pre-tax cash flow / total cash invested × 100. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
Where this fits in planning
This is a "what-if" tool, not a forecast. It helps to test ideas: what happens if the rate is 2% lower than hoped, or if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.
What this doesn't capture
This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.
£8,000 / £80,000 = 10.00% CoC return.
Inputs
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?
CoC vs cap rate vs ROI?
What CoC ignores?
Negative CoC - sell or hold?
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