Cash-on-Cash Return Calculator
Calculate your actual return on the cash invested in a property. CoC = Annual Cash Flow ÷ Total Cash Invested.
Annual mortgage payments (P&I). Enter 0 for all-cash purchase.
What is Cash-on-Cash Return?
Cash-on-Cash Return (CoC) measures the annual pre-tax cash flow relative to your actual cash investment. Unlike cap rate, it accounts for financing and shows your real return on invested capital.
Typical Cash-on-Cash Returns:
- 8-12%: Considered a solid return for stabilized properties
- 12%+: Excellent return, often in value-add deals
- Below 8%: May be acceptable in low-risk, prime locations
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Frequently Asked Questions
Why is my Cash-on-Cash return infinite?
This happens in a "BRRRR" or value-add scenario where you refinance and pull out all your original capital (or more). If your denominator (invested cash) is 0, the return is infinite.
What is a target Cash-on-Cash return?
Many active investors target 8-12% for stabilized properties. Value-add investors often look for 15-20%+ to compensate for the work involved.
Does this include principal paydown?
Technically no. Cash-on-Cash is strictly Pre-Tax Cash Flow divided by Cash Invested. Principal paydown adds to your Net Worth (ROI) but is not spendable cash.
How does leverage affect Cash-on-Cash return?
Positive leverage (interest rate < Cap Rate) boosts your Cash-on-Cash return. Negative leverage (interest rate> Cap Rate) drags it down.
Is Cash-on-Cash return pre-tax or post-tax?
It is typically calculated on a pre-tax basis (before income taxes), as individual tax situations vary wildly.