What does this calculator do?
Cash-on-cash return measures recurring cash income relative to your own initial cash commitment. Including acquisition costs, immediate repairs, and funded reserves keeps the denominator realistic. This definition treats reserves you commit to the property as part of the initial cash investment, even if they are still held in a bank account. Use the same convention for every property you compare.
How to use it
- Use annual cash flow after financing and your planned ongoing reserve.
- Add every upfront cash contribution once, including initial funded reserves.
- Compare the result with a downside scenario for vacancy, repairs, and insurance.
The math, made clear
Cash-on-cash return = annual pre-tax cash flow ÷ total upfront cash committed × 100A worked example
$70,000 down plus $10,000 acquisition costs, $5,000 repairs, and $5,000 reserves totals $90,000 committed cash. At $6,000 annual cash flow, cash-on-cash return is 6.67%.
What to keep in mind
Excludes appreciation, loan principal reduction, income taxes, sale proceeds, and timing within the year. It is not IRR or total ROI. Different analysts handle reserves differently; this page includes initial funded reserves in invested cash. A zero cash denominator is undefined.
All default values are illustrative. Results are rounded for display; calculations use full precision except where a split must allocate exact cents. Read our methodology for shared definitions and report a calculation issue if a result looks wrong.