AtlasCalcsUtility Calculation Suite
2026-09-21 7 min read

Rental Property Cash-on-Cash Return Calculator

The first-year return on the cash you actually invest for a rental property. Live calculator with worked steps and charts.

Calculator

Purchase Price Help
$

The price you pay, before closing costs.

Down Payment(%) Help
%

Investment loans typically require 20–30% down.

Repair / Rehab Budget
$
Monthly Rent Help
$

Gross scheduled rent before vacancy.

Vacancy & Credit Loss(%) Help
%

Share of scheduled rent lost to turnover and non-payment.

Property Tax (Annual)
$
Insurance (Annual)
$
Maintenance & Repairs(%) Help
%

Share of effective income budgeted for repairs.

Property Management(%) Help
%

Share of collected rent charged by the manager.

Interest Rate(%)
%
Loan Term(years)
years
Holding Period(years)
years
Advanced options (5)
Closing Costs
$
Other Monthly Income Help
$

Laundry, parking, storage, late fees, pet rent.

Utilities (Annual, Landlord-Paid)
$
Other Expenses (Annual)
$
Rent Growth(%)
%

This rental property calculator runs on a full rental pro-forma: rent is annualised and reduced by vacancy, every operating expense is itemised to reach NOI, and the loan amortises monthly at the rate entered. Results update live as you type.

Amortization schedule

Balance Interest Payment
View:
YearInterestPrincipalEnding Balance
1$15,677.60$2,285.57$222,714.43
2$15,512.37$2,450.80$220,263.63
3$15,335.20$2,627.96$217,635.67
4$15,145.23$2,817.94$214,817.73
5$14,941.52$3,021.65$211,796.08
6$14,723.08$3,240.08$208,555.99
7$14,488.86$3,474.31$205,081.68
8$14,237.70$3,725.47$201,356.21
9$13,968.38$3,994.78$197,361.43
10$13,679.60$4,283.57$193,077.86
11$13,369.94$4,593.23$188,484.64
12$13,037.90$4,925.27$183,559.37
13$12,681.85$5,281.32$178,278.05
14$12,300.06$5,663.11$172,614.94
15$11,890.68$6,072.49$166,542.45
16$11,451.69$6,511.47$160,030.98
17$10,980.98$6,982.19$153,048.79
18$10,476.24$7,486.93$145,561.86
19$9,935.01$8,028.16$137,533.69
20$9,354.65$8,608.52$128,925.18
21$8,732.34$9,230.83$119,694.35
22$8,065.04$9,898.13$109,796.22
23$7,349.50$10,613.66$99,182.56
24$6,582.24$11,380.93$87,801.63
25$5,759.51$12,203.65$75,597.98
26$4,877.31$13,085.86$62,512.12
27$3,931.33$14,031.83$48,480.29
28$2,916.97$15,046.20$33,434.09
29$1,829.28$16,133.89$17,300.21
30$662.96$17,300.21$0.00

Results

Caution

Cash-on-Cash Return

3.85%

Low — the deal is close to break-even

Annual Cash Flow

$3,424

Monthly Cash Flow

$285

Cash Invested

$89,000

Down payment, closing costs and repairs funded with cash.

Net Operating Income

$21,387

Annual Debt Service

$17,963

Cap Rate

7.13%

The unlevered equivalent of this figure.

Levered Spread (CoC − Cap Rate)

-3.28%

Positive leverage means the debt earns its keep.

Cash Payback Period

26.0 years

Live results update as you type — currently showing cash-on-cash return of 3.85%. Replace the defaults with your own rent roll, tax bill and insurance quote for an exact comparison.

Visualizations

Cap Rate vs Cash-on-Cash

7.1%Cap rate (unlevered)
3.9%Cash-on-cash (levered)

Where the Effective Income Goes

Operating expenses26%
Vacancy & credit5%
Debt service58%
Cash flow11%

Loan Balance Over the Term

Cash-on-Cash Return

3.8%
-520

Formula

The first-year return on the cash you actually wrote cheques for: down payment, closing costs and any initial rehab.

Cash-on-cash = Annual cash flow ÷ Total cash invested × 100

Variables

SymbolNameUnitDescription
CFCash flow$/yrNOI minus annual debt service
Cash inCash invested$Down payment, closing costs and rehab budget

Explanation

Cash-on-cash prices the financing: the same property at different leverage produces very different returns on cash, which is why it — not cap rate — is the investor’s year-one metric.

Step-by-Step Calculation

Follow each step to understand how the result is calculated from your inputs.

Step 1

Size the loan from the purchase price and the down payment.

Loan = price × (1 − down payment %)
Purchase price:$300,000
Down payment:25.00%
Intermediate: $300,000 × (1 − 0.25)
Result: $225,000 loan, $75,000 down
Step 2

Amortise the loan to find the monthly payment and annual debt service.

P = L × i ÷ (1 − (1 + i)^−n)
Loan:$225,000
Rate:7.00%
Term:30 years
Intermediate: i = 0.005833333333333334 per month, n = 360 payments
Result: $1,496.93/month ($17,963/year)
Step 3

Annualise the rent and deduct vacancy and credit loss.

EGI = (rent × 12 + other income) × (1 − vacancy %)
Monthly rent:$2,600.00
Vacancy:5.00%
Intermediate: $31,200 − $1,560
Result: $29,640 effective gross income
Step 4

Subtract every operating expense to reach net operating income.

NOI = EGI − taxes − insurance − maintenance − management − utilities − other
Effective income:$29,640
Operating expenses:$8,253
Intermediate: $29,640 − $8,253
Result: $21,387 NOI
Step 5

Compute cash-on-cash return from the figures above.

Cash-on-cash = annual cash flow ÷ cash invested
NOI:$21,387
Debt service:$17,963
Cash invested:$89,000
Intermediate: Cash-on-cash = 3.85% on $89,000
Result: 3.85% on $89,000
Final Answer
3.85%

Worked Examples

See how the calculator works with different scenarios.

Scenario

The rental property cash-on-cash return calculator run on the values above, showing the full calculation path rather than only the answer.

Inputs

Price:300000
Rent Monthly:2600
Down Payment Pct:25
Rate:7

Calculation

1. Size the loan from the purchase price and the down payment. → $225,000 loan, $75,000 down 2. Amortise the loan to find the monthly payment and annual debt service. → $1,496.93/month ($17,963/year) 3. Annualise the rent and deduct vacancy and credit loss. → $29,640 effective gross income 4. Subtract every operating expense to reach net operating income. → $21,387 NOI 5. Compute cash-on-cash return from the figures above. → 3.85% on $89,000

Result

Cash-on-Cash Return: 3.85%

Interpretation

$3,424 of annual cash flow on $89,000 of invested cash is a 3.85% return; against a 7.13% cap rate the leverage is negative.

Understanding Your Result

Your Result: Cash-on-Cash Return: 3.85%

Typical range: Cash-on-cash targets depend on strategy: 8–12% for a levered buy-and-hold, 4–6% for a low-leverage quality asset, and negative during a value-add lease-up.

What This Means

Cash-on-cash prices the financing: the same property at different leverage produces very different returns on cash, which is why it — not cap rate — is the investor’s year-one metric.

Why It Matters

$3,424 of annual cash flow on $89,000 of invested cash is a 3.85% return; against a 7.13% cap rate the leverage is negative.

Professional Interpretation

$3,424 of annual cash flow on $89,000 of invested cash is a 3.85% return; against a 7.13% cap rate the leverage is negative.

How this is calculated

The first-year return on the cash you actually wrote cheques for: down payment, closing costs and any initial rehab.

What drives the result

The pro-forma method: annualise the rent, deduct vacancy to reach effective gross income, subtract operating expenses to reach net operating income, then subtract debt service to reach cash flow. Each layer answers a different question — value (cap rate), lender safety (DSCR) and investor return (cash-on-cash).

Recommendations

  • •Cash-on-cash rises with leverage and falls with the rate — re-run it at the rate you are actually quoted.
  • •Include a capital-expenditure reserve in the expenses; skipping it is the usual reason projected returns miss.

Educational Content

Introduction

Rental analysis starts with one year of operations: scheduled rent, vacancy and credit loss, every operating expense, and the debt payment. NOI is what remains for the owner; everything else — cap rate, cash flow, DSCR, cash-on-cash — is NOI viewed from a different angle.

Concept Explanation

The pro-forma method: annualise the rent, deduct vacancy to reach effective gross income, subtract operating expenses to reach net operating income, then subtract debt service to reach cash flow. Each layer answers a different question — value (cap rate), lender safety (DSCR) and investor return (cash-on-cash).

Applications

▸Screening a listing against your price and return requirements in minutes
▸Comparing two or three candidate properties on the same pro-forma assumptions
▸Preparing a lender-ready one-year operating statement for a loan request
▸Setting rents and budgeting expenses for a property you already own

Benefits

  • •One consistent model across every property, so comparisons are fair
  • •Forces every expense to be named and budgeted rather than ignored
  • •Separates the property’s performance from the financing around it

Limitations

  • •A one-year pro-forma cannot capture capital expenditures that arrive in lumps — roofs, systems and exteriors need their own reserve
  • •Actual vacancy and expense ratios vary by market and management quality; a single assumption hides that spread
  • •The model assumes the rent roll is at market; in-place rents below market flatter the deal

Best Practices

  • •Build the pro-forma from your own quotes — insurance, taxes and management — not the seller’s summary
  • •Stress the deal: rent down 5%, vacancy up 5% — if it still pays, it will survive a soft year
  • •Fund a capital-expenditure reserve of about 5% of rent before calling any cash flow "positive"

Common Misconceptions

Myth: NOI is the profit the owner pockets.
Truth: NOI comes before the mortgage payment; only cash flow (NOI − debt service) reaches the owner’s bank account.
Myth: A property with positive cash flow is always a good deal.
Truth: Positive cash flow on an overpriced building can still be a worse investment than the same cash in an index fund — compare returns, not just sign.
Myth: Operating expenses are optional line items.
Truth: Vacancy, maintenance and management are real costs even when self-managed; underwriting them at zero inflates the price you can justify.

Practical Tips

  • •Compare with your alternative: an 8% cash-on-cash competes with whatever else the same cash earns
  • •Recalculate after any refinance — pulling cash out mechanically raises the ratio

Common Mistakes

Counting appreciation or principal paydown in the numerator.
Cash-on-cash measures spendable cash only; use ROI or IRR for total return.
Forgetting closing costs in the denominator.
Cash invested includes everything spent to get the keys, not just the down payment.

Assumptions

This calculator makes the following assumptions to provide estimates:

First-year basis: The ratio uses year-one figures with no growth adjustments.

Limitations

Be aware of these limitations when using this calculator:

Limitation: A one-year pro-forma cannot capture capital expenditures that arrive in lumps — roofs, systems and exteriors need their own reserve
Limitation: Actual vacancy and expense ratios vary by market and management quality; a single assumption hides that spread
Limitation: The model assumes the rent roll is at market; in-place rents below market flatter the deal

Frequently Asked Questions

Answers to common questions about this calculator.

What cash-on-cash return should I target?
8–12% is a common target for leveraged rentals; below ~4% the same cash usually works harder elsewhere.
Who uses the rental property cash-on-cash return calculator?
It is used by rental investors screening and pricing deals, by owner-operators budgeting expenses and rents, and by agents, lenders and advisers sanity-checking the numbers before money moves. It sits in the Rental Property group of the Real Estate Investing section of Atlascalcs.
How accurate is the rental property cash-on-cash return calculator?
Every figure follows from the inputs using standard property underwriting mathematics, so it is accurate to the quality of the values you enter. Lenders, appraisers and tax assessors each apply their own adjustments, so expect small differences against formal documents.
Do I need to sign up or pay to use this calculator?
No. Every Atlascalcs calculator is free, runs entirely in your browser and never asks for an account. Nothing you enter is uploaded or stored.
Can I use these numbers in a formal valuation or loan application?
The calculator is an underwriting aid, not an appraisal or a lender offer. Lenders and appraisers apply their own adjustments, so treat the output as a disciplined estimate to bring to those conversations.
How do I choose realistic inputs?
Pull rent from comparable leases, property tax from the current assessment, insurance from a quote, and management and maintenance from what operators in your market actually pay. Seller pro-formas are marketing documents.

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Related Guides

Deepen your understanding with these educational resources.

Glossary

Technical terms used in mortgage calculations explained in plain language.

Cash-on-Cash Return
Annual cash flow divided by the cash you invested — the first-year return on your down payment.
Net Operating Income (NOI)
Effective gross income minus operating expenses, before debt service and income tax. The core measure of a property’s earning power.
Capitalisation Rate
NOI divided by price or value — the unlevered yield the income stream offers at today’s price.

Authoritative References

Trusted sources and standards referenced by this calculator.

Applicable Standards

Level-payment amortisation, payments assumed in arrearsIncome and expenses annualised; percentages entered as annual ratesStraight-line depreciation per IRC §168 recovery periodsMoney rounded for display only; all calculations run at full precision

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Page Information

Last Updated:

2026-09-21

Version:

2.0.0

License:

Free to use for educational and professional purposes.