Property & Financing
Income & Expenses
Investment Summary
Net Cash Flow = Gross Rent × (1 - Vacancy Rate) − (Property Tax + Insurance + Maintenance) − Annual Mortgage Payments.
Total Cash Invested = Down Payment + Closing Costs.
Why Cash‑on‑Cash Return Matters
Cash‑on‑cash return measures the actual cash income you earn relative to the cash you invested. Unlike cap rate, it accounts for financing costs. A strong CoC return (typically 8%+) indicates positive leverage and healthy cash flow. Use this calculator to compare deals and optimize your down payment or interest rate.
Pro tip: Include a realistic vacancy rate (5-10%) and maintenance budget (1% of property value annually) to avoid overestimating returns.
Frequently Asked Questions About Real Estate ROI
What is cash-on-cash return in real estate?
Cash-on-cash return measures the annual pre-tax cash flow divided by the total cash invested (down payment + closing costs). It's a key metric for rental property profitability and helps compare financing scenarios.
How do you calculate ROI on a rental property?
ROI (cash-on-cash) = (Annual Net Cash Flow ÷ Total Cash Invested) × 100. Net cash flow = gross rental income − vacancy − operating expenses − annual mortgage payments.
What expenses should I include in a real estate investment analysis?
Include property taxes, insurance, maintenance/repairs, property management fees (if applicable), HOA fees, and utilities. This calculator lets you input property tax, insurance, and maintenance separately.
What is a good cash-on-cash return for rental property?
Most investors target 8-12% cash-on-cash return, but it varies by market, risk tolerance, and financing terms. 6%+ is often considered acceptable for stable properties with appreciation potential.
Should I include vacancy rate in my ROI calculation?
Yes. Vacancy accounts for lost income between tenants. A typical vacancy rate is 5-10% depending on the market. This calculator adjusts gross rent by the vacancy rate for more accurate cash flow.
How is the monthly mortgage payment calculated?
We use the standard amortization formula: M = P × r × (1+r)^n / ((1+r)^n - 1), where P is the loan amount (purchase price − down payment), r is monthly interest rate, and n is total months (loan term in years × 12).