0.96%
Below typical investment target
0%0.96%20%+
Total Cash Invested
$75,000
Annual Cashflow
$720
Monthly Cashflow
$60
Monthly NOI
$1,260
CoC return over time
Target 8%
Cash Invested
$
$
$
Optional — any upfront repairs or improvements
Income
$
%
Typical: 5–10%
$
Parking, laundry, storage, etc.
Operating Expenses (monthly)
$
$
%
Of gross monthly rent
$
$
Optional — leave 0 to exclude
$
Set aside for future large repairs
Financing
$
Principal & interest, plus escrow if included
Projection
%
%
yrs
What rent do I need for my target return?
%
Required annual cashflow$6,000
Required monthly cashflow$500
Required monthly rent$2,506
You need $506/mo more rent than your current $2,000/mo to hit 8% CoC.
Monthly Breakdown
Cash Invested
Down Payment$70,000
Closing Costs$5,000
Total Cash Invested$75,000
Monthly Income
Gross Rent$2,000
Vacancy (5.00%)($100)
Effective Gross Income$1,900
Monthly Expenses
Property Taxes($200)
Insurance($80)
Property Management (8%)($160)
Maintenance($100)
CapEx Reserve($100)
Total Operating Expenses($640)
Net Operating Income (NOI)$1,260
Debt Service
Mortgage Payment($1,200)
Monthly Cashflow$60
Cash-on-Cash Return0.96%
$720 annual cashflow ÷ $75,000 cash invested
- What is cash-on-cash return?
- Cash-on-cash return measures how much annual pre-tax cashflow you earn relative to the cash you actually invested, typically the down payment, closing costs, and any upfront renovation costs. If you invested $80,000 and your property earns $6,400 in annual cashflow, your cash-on-cash return is 8%.
- Unlike cap rate, CoC accounts for your specific financing. Two investors buying the same property with different loan terms will have the same cap rate but different cash-on-cash returns. CoC answers the question: how hard is my invested cash actually working?
- What is a good cash-on-cash return?
- A CoC of 6–10% is generally considered solid for a buy-and-hold rental property in most markets. Below 4% starts to look unattractive compared to passive alternatives. Above 10% is excellent, though it often signals either a genuinely great deal or overly optimistic expense assumptions, worth a second look at your numbers.
- Context matters significantly. In expensive coastal markets, investors often accept 2–4% CoC in exchange for strong appreciation potential. In secondary and tertiary markets, 8–12% CoC is achievable. The right target depends on your investment strategy and local market dynamics.
- What should be included in total cash invested?
- Total cash invested includes all out-of-pocket money you put into the deal at acquisition: your down payment, closing costs (typically 2–5% of the purchase price), and any immediate renovation or repair costs needed to get the property rent-ready.
- Do not include the loan amount, only the cash you personally contributed. If you later refinance and pull cash out, your effective cash invested decreases, which increases your CoC return. This is the core logic behind the BRRRR strategy.
- How is cash-on-cash different from cap rate?
- Cap rate is a property-level metric: it measures Net Operating Income (NOI) as a percentage of the property's value, completely ignoring how it is financed. It is useful for comparing properties regardless of leverage.
- Cash-on-cash is an investor-level metric: it measures your actual cashflow after the mortgage as a percentage of your cash invested. Leverage amplifies CoC — a higher loan-to-value ratio with a low mortgage rate can dramatically increase CoC even if cap rate stays the same. That amplification works in reverse too: a high interest rate can turn an attractive cap rate into a poor CoC.
- Why does cash-on-cash return improve over time?
- Because the denominator, your total cash invested, stays fixed after purchase, while the numerator, annual cashflow, grows as rents increase. Your down payment does not increase when rents go up, so each dollar of rent growth directly improves your CoC.
- This dynamic is one of the core arguments for holding rental properties long-term. A property that starts at 4% CoC may reach 8–10% CoC a decade later purely from organic rent growth, without any change to the property itself.
Track your rental returns over time
Calm Sea tracks cash-on-cash return, cashflow, and net worth across your entire portfolio in one view.