🏠 Cash-on-Cash Return Calculator
Calculate annual pre-tax cash-on-cash return on your actual cash invested in a rental property.
Cash-on-Cash Return vs Cap Rate
Cash-on-Cash (CoC) return measures return on actual cash invested, accounting for financing. Cap rate ignores financing and measures unleveraged return. CoC = Pre-Tax Annual Cash Flow ÷ Total Cash Invested. If you put 20% down and finance the rest, CoC can be significantly higher or lower than cap rate depending on your mortgage rate.
People Also Ask
Most investors target 6–12% CoC return as a minimum. In premium markets with appreciation potential, 4–6% may be acceptable. In secondary markets, 10%+ is achievable. Always compare to your alternative uses of capital — if a HYSA pays 5%, your rental CoC should meaningfully exceed that to justify illiquidity.
No — CoC only measures income return on cash invested, not property appreciation. Total return includes CoC return + equity buildup (mortgage paydown) + appreciation. CoC is the 'current yield' component.