How hard is your money working? Cash-on-cash return compares a rental's yearly cash flow with the cash you actually put into the deal.
Taxes, insurance, vacancy, repairs, CapEx and management. A third of rent is a common rough figure if you don't have numbers yet.
Cash-on-cash return is the yearly pre-tax cash flow divided by the total cash you invested. Unlike cap rate, it includes your financing, so it answers the question an investor actually has: if I put this much money into this deal, what percentage do I get back each year? It also makes it easy to compare a rental against any other place you could put the same cash.
Down payment, closing costs and any rehab you pay for up front. Loan money doesn't count. Only your own cash.
Rent minus operating expenses minus the mortgage, times 12. Be honest about vacancy, repairs and CapEx.
Cash flow ÷ cash in. 10% means you get a tenth of your money back each year, or all of it back in about ten years.
Deal Snap REI Pro calculates cash-on-cash return automatically on every Zillow listing you open, alongside cap rate, DSCR and your max offer, so you can rank listings without a spreadsheet.
Install the Chrome Extension — FreeMany rental investors target 8–12%. Some accept less in appreciating markets; others want 15%+ in cheaper, higher-risk areas. Compare it with what your cash could earn elsewhere with less work.
Cap rate ignores financing and measures the property. Cash-on-cash includes your mortgage and measures your deal. Leverage can push cash-on-cash well above the cap rate when rates are low, or below it when rates are high.
No. It only counts cash that hits your account. Appreciation, principal paydown and tax benefits are part of total return, but they aren't spendable each month.
Yes. If a BRRRR refinance pulls all of your cash back out, you have no cash left in the deal, so any positive cash flow is an infinite return. Use the BRRRR calculator to model that case.