Free Investor Tool
Measure the leveraged cash return on a rental. Cash-on-cash = annual pre-tax cash flow ÷ total cash invested. Enter your rent, expenses, mortgage payments, and the cash you put in.
Pre-tax estimate. Total cash invested = down payment + closing costs + rehab. Ignores appreciation and principal paydown.
Cash-on-Cash Return = Annual Pre-Tax Cash Flow ÷ Total Cash Invested. Unlike cap rate, it includes your financing — so leverage from a loan can boost it. Annual cash flow is your effective rent minus operating expenses and your annual mortgage payments. Total cash invested is your down payment plus closing costs plus any rehab. Many California investors target 6–10%+, and leverage via a DSCR loan is often what gets them there.
See the full breakdown in our cash-on-cash guide, or finance the deal with a DSCR loan.
Many rental investors look for 6–10% or higher, though it varies by market and strategy. Leverage (a mortgage) can raise cash-on-cash return versus buying all cash, as long as the property still cash-flows.
Cap rate ignores financing (unleveraged), while cash-on-cash includes your loan payments and only the cash you actually invested. Two identical properties can have the same cap rate but very different cash-on-cash returns depending on the loan.
Your down payment, closing costs, and any upfront rehab or reserves — the actual out-of-pocket cash to acquire and stabilize the property.
No. It only measures annual cash flow versus cash invested. It ignores appreciation, loan principal paydown, and tax benefits, which are additional components of total return.
We arrange DSCR and hard money loans for California investors — no tax returns, close in an LLC. Free quote, no credit pull to start.