Free tool — cash-on-cash
Cash-on-cash return.
Annual cash flow ÷ total cash invested. The most important metric for evaluating rental property returns — what you actually earn on the cash you put down.
cash invested
income & financing
monthly operating expenses
cash-on-cash
2.1%
weak
total cash invested
$36,000
down payment + closing + rehab
monthly cash flow
$63
after all expenses + mortgage
annual cash flow
$759
cash flow × 12
cap rate
6.9%
NOI / purchase price (unleveraged)
P&I payment
$682
30-year fixed mortgage
total monthly expenses
$1,237
all costs including mortgage
Below 6%
Weak return.
Consider whether appreciation potential or other factors justify the deal. Otherwise, walk.
6 – 10%
Acceptable.
Good for appreciating markets or safer, stabilized assets in major metros.
10%+
Strong.
Typical in cash flow markets like Cleveland, Memphis, Detroit, Indianapolis.
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deals.
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