Cash-on-Cash Return Calculator

Cash-on-cash (CoC) return measures the annual pre-tax cash income earned on the actual cash you invested (down payment + closing costs + renovation). Unlike ROI, it excludes appreciation and principal paydown — it only captures the income yield on your out-of-pocket equity. A CoC of 6–10% is generally considered a solid return for residential rentals.

Cap rate = NOI ÷ Property Value and measures unlevered yield (as if you paid all cash). Cash-on-cash accounts for financing by subtracting mortgage payments before dividing by equity invested. A property with a 7% cap rate may yield 10%+ CoC with leverage, or below cap rate if loan terms are unfavorable.

NOI = Effective Gross Income − Operating Expenses. Operating expenses include property taxes, insurance, property management fees (typically 8–10%), maintenance/repairs (1% of value/year is a common estimate), vacancy loss (5–10% of gross rent), and utilities paid by the owner. Mortgage payments are NOT included in NOI — they appear below the line in cash flow.

Most real estate investors target 6–10% CoC for stable residential properties. Value-add and commercial deals may target 10–15%. Markets with high appreciation potential (coastal cities) often trade at 3–5% CoC. Always weigh CoC alongside total return (appreciation + principal paydown + tax benefits) for a complete investment picture.