Enter the annual pre-tax cash flow generated by your investment and the total cash invested into the calculator. The calculator will display your cash-on-cash return percentage.

Cash on Cash Return Calculator

Enter any 2 values to calculate the missing variable

Cash on Cash Return Formula

The following formula is used to calculate the cash on cash return of an investment. 

\text{COCR}(\%) = \left(\frac{CF}{I}\right)\times 100
  • Where COCR (%) is the cash-on-cash return percentage
  • CF is the annual, pre-tax cash flow
  • I is the total cash invested

The annual, pre-tax cash flow refers to the investment’s net cash flow over a year before income taxes (typically after operating expenses and any debt service, if applicable).

Total cash invested refers to the total out-of-pocket cash put into the investment (for example, down payment, closing costs, and any initial repairs/capital costs), excluding amounts financed.

What is Cash-on-Cash Return?

Cash-on-Cash (CoC) is a financial metric widely used in real estate investing to evaluate an investment’s annual cash yield on the cash you invested. It provides a simple and effective way to assess the cash flow generated by an investment property relative to the total cash invested.


CoC is calculated by dividing the annual pre-tax cash flow from the property by the total cash investment and multiplying by 100 to express it as a percentage. This metric allows investors to determine how much cash they are earning on the money they have put into the property.

CoC focuses on ongoing operating cash flow (such as rental income minus operating expenses and debt service). It does not include property appreciation/depreciation or sale proceeds; those are typically evaluated using other measures such as total ROI or IRR.

Investors often use CoC as a benchmark to compare different investment opportunities. Higher CoC percentages indicate higher annual cash returns, while lower percentages suggest lower annual cash returns. However, it is important to note that CoC is just one aspect of evaluating an investment property, and it should be considered alongside other factors such as market conditions, financing terms, and risk tolerance.

Cash on Cash Return Example

How to calculate cash on cash return

  1. First, determine the total amount invested

    This is the total cash invested in the asset.

  2. Next, determine the annual pre-tax cash flow

    This is the total income/cash flow your new investment is generating on a yearly basis.

  3. Finally, calculate the COCR

    Calculate the cash on cash return of your investment using the equation above and the information from steps 1 and 2.

FAQ

What is cash on cash return?

Cash on cash return is a measure of the annual cash earned from an investment with respect to the total amount of money invested.

What is a good cash on cash return?

There is no single good cash on cash return; it depends on the market, financing, and risk. Many investors look for high-single-digit to low-double-digit annual CoC returns, while around 20% or higher is generally considered very strong. A 20% CoC corresponds to a simple payback period of about 5 years if cash flow stays constant, ignoring taxes, vacancies, financing changes, and resale value.

cash on cash return formula