Cash-on-cash return calculator.
Annual cash flow ÷ total cash invested. The number that tells you what your down payment actually earns in year one — not what the property is worth, not what it might appreciate to, but what lands in your account.
How to use this calculator.
Start with the purchase price and the down payment percentage your lender expects — 20–25% is typical on an investment loan, and it varies by lender. Add closing costs and any rehab you'll pay for out of pocket; those three lines together are your total cash invested, and they are the denominator of the whole calculation. Next, enter market rent, your interest rate (around 7% on rental loans lately, though it moves with credit profile and lender), and the monthly operating costs: taxes, insurance, management, maintenance and capex, and a vacancy reserve. The calculator subtracts every expense and the principal-and-interest payment from rent, annualizes what's left, and divides it by the cash you put in. Change one field at a time — that's how you find out which assumption your return actually depends on.
Not sure what belongs in the expense fields? Our breakdown of rental property operating expenses lists the line items most investors forget, and the guide to how to analyze a rental property walks through the full underwriting sequence from rent estimate to offer.
What it measures.
What it hides.
The formula.
Cash-on-cash = annual pre-tax cash flow ÷ total cash invested. Cash flow is rent minus every operating expense minus principal and interest. Cash invested is down payment plus closing costs plus rehab — never the full purchase price, because the bank funded most of it.
The brackets.
Under 6% you're being paid bond-like money for landlord risk. Six to ten is a normal band for a stabilized rental in a major metro. Double digits usually mean a cash-flow market, self-management, or rehab you did with your own hands.
Why it matters.
Cap rate ignores your loan; cash-on-cash doesn't. It's the one common metric that answers what every investor is really asking — what does this deal pay on the money I bring to closing? That also makes it the cleanest way to compare a financed purchase against paying cash.
Before you offer.
Find high cash-on-cash
deals.
Verleon AI underwrites every active listing across all 50 states — cash-on-cash, DSCR, cap rate, and a deal score on each one, so you only open the deals that already pencil out.