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Cash-on-cash return measures what your own money earns — not what the property earns. Enter the deal's income, expenses, financing, and the cash you put in to see the annual return on your actual capital.
These are estimates from the numbers you entered. Want them calculated from real comparable rentals for a specific address?
Run a free CMA →Cash-on-cash return answers the question that actually matters when you're deciding where to put money: what does this deal pay me on the capital I hand over? Cap rate ignores your loan. Cash-on-cash doesn't — which is why leverage can turn a 6% cap property into a 12% cash-on-cash return, or into a negative one if you borrowed at the wrong rate.
What doesn't go in: the loan amount. That's the point — you're measuring the return on your money, not the bank's.
| Line item | Amount |
|---|---|
| Effective gross income | $25,080 |
| Operating expenses | −$9,106 |
| Net operating income | $15,974 |
| Annual debt service ($1,450 × 12) | −$17,400 |
| Annual cash flow | −$1,426 |
| Cash invested | $62,500 |
| Cash-on-cash return | −2.28% |
That example is deliberately unflattering. At a 6.39% cap rate with a payment that size, the deal bleeds. This is exactly the scenario that looks fine on a cap-rate-only screen and loses money every month in reality — which is why you run both numbers.
Most investors target 8–12% cash-on-cash on a stabilized long-term rental. Below 5% you're accepting low current return in exchange for appreciation or principal paydown, which can be a legitimate strategy in a growth market but is a bet, not income. Above 15% usually signals either a genuinely great buy, a value-add play mid-execution, or an expense assumption that's too optimistic.
The rent number drives everything above. CompPilot pulls actual comparable rentals for any US address and returns a defensible rent range — plus cap rate, DSCR, cash flow, and a written market memo.
Get a free rental analysis →Most long-term rental investors target 8–12%. Under 5% means you're betting on appreciation rather than income. Over 15% is possible but worth double-checking — it often means maintenance, vacancy, or capital expenditure assumptions are too low.
No. It measures pre-tax cash flow only. Your actual total return also includes principal paydown from each mortgage payment, appreciation, and tax benefits like depreciation. Cash-on-cash is deliberately narrow because cash flow is the part that shows up in your bank account every month.
The property isn't producing enough net operating income to cover its debt service. Common causes: rent below market, an interest rate that outran the rents when you bought, or an expense load heavier than underwritten. The fix is usually rent — verify what the unit should actually be renting for before assuming the deal is broken.
Only when the property's return exceeds the cost of the debt. If a property yields 8% and you borrow at 6%, more leverage amplifies your return. If you borrow at 9% on the same property, leverage works against you. This is why cash-on-cash swings so hard with rate changes.
If you run a real estate blog, brokerage, lending, or property management site, you can embed this cash-on-cash calculator free — two lines of HTML, no API key, no signup, unlimited page views. All the math runs in the visitor's browser, and it renders in an isolated shadow root so it can't collide with your site's styles.
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