Cash on Cash Return

Annual cash flow divided by total cash invested.

Example Result

Sample Data

-4.54%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Cash on Cash Return Formula

Annual Cash Flow Before Tax / Total Cash Invested x 100

-$4,023 / $110,830 x 100

-4.54%

How This Value Changes Over Time

At Purchase / Year 1 Annual Cash Flow Before Tax / Total Cash Invested x 100

Over Time (Year 5) Cash Flow grows as rents rise; invested capital is fixed

What This Means

A sample property priced at $385,000 with $2,850/month rent has a cash on cash return of -4.54% at Purchase (Month 0). This is the metric that tells you how hard your actual dollars are working. A property with a modest cap rate can deliver excellent cash-on-cash returns with favorable financing. Most investors target 8-12% cash-on-cash returns.

Where This Value Comes From

Cash on Cash Return is not entered directly — it is calculated from Cash Flow Before Tax and Total Cash Invested. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Cash on Cash Return

Cash Flow Before Tax

Cash remaining after operating expenses and debt service.

-$4,023

Purchase

Total Cash Invested

Total cash committed to the property: closing costs, rent-ready, reserves, and negative cash flow.

$110,830

Purchase

Calculations That Use Cash on Cash Return

Equivalent Bond Yield

Comparison Metrics

-4.54%

Purchase

Platform Distribution

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Why It Matters

This is the metric that tells you how hard your actual dollars are working. A property with a modest cap rate can deliver excellent cash-on-cash returns with favorable financing. Most investors target 8-12% cash-on-cash returns.

Detailed Explanation

Cash on Cash Return measures the annual pre-tax cash flow relative to the actual cash you put into the deal (down payment + closing costs + rehab). Unlike cap rate, it accounts for financing and shows the return on YOUR money, not the property's total value.