Rental Property Calculator: Cash-on-Cash Return
Enter the price, the rent, and the real expenses. You get monthly cash flow, cash-on-cash return, cap rate, and the DSCR a lender will run, plus a first-year total return that keeps unrealized appreciation in its own column where it belongs.
Property & Income
Purchase & Loan
Auto-calculated (1% of price/yr)
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Cash-on-Cash
0.36%
Monthly Cash Flow
$24
Cap Rate
6.39%
DSCR
1.30
This property pays you $24 a month after every operating cost, which is a 0.36% return on the $81,000 you put in.
From Rent to Cash Flow (Monthly)
Cap rate stops at net operating income, because it measures the property. Cash flow continues through the mortgage, because that measures your deal. Full payment including taxes and insurance is $1,998.
The 1% Screen
Monthly rent as a share of price. A rough first-pass filter, not a rule of physics.
This sits under 1%, which is normal in appreciation markets and says little on its own. The cash flow and cash-on-cash figures above are what decide the deal.
The property carries itself. Now see your options.
This calculator estimates. Run the deal with the desk and your numbers carry over. No retyping.
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What is cash-on-cash return?
Cash-on-cash return is your annual cash flow divided by the cash you actually put into the deal. Put $81,000 in and collect $8,100 over the year, and you earned 10%. The basis is the money that left your account: down payment, buy-side closing costs, and any upfront rehab. Loan proceeds never count, because the bank supplied that part. This is the figure that tells you what your own money earned, which is a different question from what the building earned.
How do you calculate it?
Build net operating income first. Start with gross rent plus any other income, take out a vacancy allowance, then subtract every operating expense: taxes, insurance, management, repairs, a capital reserve, HOA dues, and any utilities you pay. What remains is NOI. Subtract the mortgage payment and you have cash flow. Multiply by twelve and divide by your invested cash. The waterfall in the calculator shows each step, so you can see exactly which line is eating the return.
What counts as a good cash-on-cash return?
It depends on what else your money could do and what risk you are accepting, so anyone quoting a universal number is guessing. The more useful comparison is against a passive alternative you could hold instead. A cash-flow market in the Midwest often produces a higher figure than a coastal appreciation market, and investors accept the lower one when they expect value growth to make up the difference. Judge the number against your own alternative, then check whether the assumptions producing it are honest.
Where the numbers usually go wrong
Optimistic expenses. Vacancy set at zero because the tenant seems reliable, management omitted because you plan to self-manage, no capital reserve because the roof looks fine. Each omission flows straight into net operating income and lifts every return figure downstream. The other common error is treating appreciation as income. Assumed growth is not money you can spend, which is why this calculator keeps it in a separate column and says so plainly when a property only looks profitable because of it.
Cash-on-cash, cap rate, and DSCR
Three numbers, three jobs. Cap rate measures the property with no financing in it, so it compares one asset against another. Cash-on-cash measures your deal after the loan, so it tells you what your money earned. DSCR divides rent by the full payment and is the coverage test a lender runs before approving the file. A property can post a healthy cap rate and thin cash flow, or clear the lender’s ratio while paying you very little. Read all three. The cap rate calculator goes deeper on the first, the DSCR calculator on the third, and how to calculate DSCR walks the coverage math step by step.
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Should I count property management if I manage the rental myself?
Yes. Professional practice includes management whether or not you hire it out, because the property should not look profitable only while you work for free. Self-managing means you keep that money as payment for your time. Leaving it out inflates every return figure and makes your deal look better than the one you are comparing it against.
What is the difference between cash-on-cash and return on investment?
Cash-on-cash counts spendable cash flow against the cash you invested, so it measures one year of actual money. Return on investment usually folds in principal paydown and appreciation, which are equity rather than cash. Both are useful. Only one of them pays your bills while you hold the property.
How much should I budget for capital expenses?
Enough that a roof or a furnace does not become an emergency. Many investors set aside somewhere around 5% to 10% of rent, and older properties warrant more. This calculator leaves the reserve at zero until you enter one, so the figure is yours rather than an assumption we made for you.
Does the calculator include income taxes or depreciation?
No. Every figure here is pre-tax, and depreciation is a tax concept rather than a cash one. Your after-tax outcome depends on your bracket, your other income, and your entity structure, so it belongs with your CPA rather than in a general calculator.
Why does my cap rate differ from the one in the listing?
Because marketed cap rates are usually built on optimistic expenses: vacancy understated, management omitted, reserves missing. Each omission lifts net operating income and the cap rate with it. Rebuild the number from fully loaded expenses before you trust any figure a listing hands you.
Numbers work? Price the loan.
The calculator estimates. Real terms come from lending partners' programs, priced on the property's rent, with no tax returns in the file.
Start in about 60 seconds · No tax returns · No W-2s