Rental Property Cash-on-Cash Return
Know your real return on the cash you invest.
Purchase
Income
Laundry, parking, storage, etc.
Expenses
% of rent
% of rent
Cash-on-Cash Return
0%
Cap Rate
0%
Monthly Cash Flow
$0
Total Cash Invested
$0
NOI (Annual)
$0
Mortgage Payment
$0
1% Rule
--
Rent / Purchase Price
50% Rule Check
--
Operating expenses / Gross rent
Income vs Expenses
Monthly Breakdown
Understanding Cash-on-Cash Return
Cash-on-cash return measures the annual pre-tax cash flow relative to the total cash invested. It answers: "What percentage return am I getting on the actual dollars I put in?"
Formula: CoC = Annual Cash Flow / Total Cash Invested
Cap Rate vs Cash-on-Cash Return
- Cap Rate = NOI / Purchase Price (ignores financing)
- Cash-on-Cash = Cash Flow / Cash Invested (includes financing effects)
Leverage amplifies your CoC return. A property with a 6% cap rate financed at 75% LTV might yield a 10%+ CoC return because you're only investing 25% of the price.
Rules of Thumb
- 1% Rule: Monthly rent should be at least 1% of the purchase price
- 50% Rule: Operating expenses (excluding mortgage) typically run about 50% of gross rent
- Good CoC Return: 8-12%+ is generally considered good for rental properties