Cash-on-Cash Return Calculator

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

Try 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. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens 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

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. The number represents one scenario rather than a forecast.