Calculator guide
Cash-on-Cash Return Calculator
Cash-on-cash return shows how efficiently the cash you actually invest is producing annual income.
What the metric means
Cash-on-cash return shows how efficiently the cash you actually invest is producing annual income.
Formula
Where:
- Annual Cash Flow
- Monthly cash flow × 12 (spendable income after all expenses and debt service)
- Total Cash Invested
- Down payment + closing costs + any upfront rehab costs paid at acquisition
Example:
- Annual cash flow = $4,800 ($400/month × 12)
- Total cash invested = $60,000 ($55,000 down + $5,000 closing)
- Step 1: CoC Return = 4,800 ÷ 60,000
- Step 2: CoC Return = 0.080 = 8.0%
An 8% cash-on-cash return means your $60,000 investment generates $4,800 annually — $0.08 for every dollar of capital deployed.
How DealPrism uses it
DealPrism updates cash-on-cash return as down payment, closing costs, rent, and expenses move so users can see how leverage changes both risk and return.
Common mistakes
- Leaving closing costs or rehab cash out of the denominator.
- Comparing returns without checking if the underlying cash flow is durable.
- Ignoring the tradeoff between more cash flow and more cash invested.
Related FAQs
Analyze your own deal
See this metric in context with your purchase price, rent, expenses, and financing assumptions.
Analyze your own dealDealPrism provides educational analysis based on available data and user assumptions. Results are estimates and may change if rent, taxes, insurance, financing, or other inputs are updated. This content is not financial, legal, tax, or investment advice.