Calculate annual cash flow divided by total cash invested in a property
What This Means For You
Get a personalized explanation of these results — what they actually mean for your situation, and how small changes would affect them.
How it works
Compares the annual pre-tax cash flow from a leveraged property against the actual cash you put in. Unlike cap rate, it accounts for financing, so it shows what the deal returns on your own money rather than on the full purchase price.
CoC = Annual pre-tax cash flow / Total cash invested × 100
Annual cash flowNOI less annual debt serviceTotal cash investeddown payment plus closing costs plus upfront rehab
- Annual cash flow: 84,000 − 76,800 = 7,200
- CoC: 7,200 / 68,000
- Leverage amplifies this figure in both directions. When the cap rate exceeds the loan constant, borrowing lifts cash-on-cash; when rates rise above the cap rate, the same debt drives it negative.
- It counts only cash flow, ignoring principal paydown, appreciation, and tax shelter from depreciation. Those often make up most of the real return in year one.
- It is a single-year snapshot with no time value of money. For a hold-and-sell projection use IRR instead.
- A refinance that pulls out your original capital sends the denominator toward zero and the return toward infinity, which is why investors report infinite return on BRRRR deals. The metric stops being meaningful there.
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Frequently Asked Questions
Yes. Cash On Cash Return costs nothing, needs no account, and runs right in your browser. There is no paywall, no watermark on the results, and no limit on how many times you can run the numbers.
Cash On Cash Return uses the standard formula for this kind of calculation, so the output is only as good as the figures you type in. Rates, fees, and rules in finance shift over time, and we review the underlying assumptions on a regular schedule; check the "Last reviewed" date above for the most recent pass. Spotted something off? There's a feedback button in the bottom-right corner.
Treat the output of Cash On Cash Return as a starting point, not final advice. Tax filings, loan approvals, insurance claims, property deals, and legal matters all depend on details a calculator cannot see: your full financial picture, local rules, and the specifics of your paperwork. Run the numbers here, then confirm anything consequential with an accountant, lawyer, or licensed advisor.