Cash-on-Cash Return Calculator Formula

Understand the math behind the cash-on-cash return calculator. Each variable explained with a worked example.

Use the Cash-on-Cash Return Calculator

Formulas Used

Cash-on-Cash Return

cash_on_cash = (annual_pre_tax_cash_flow / total_cash_invested) * 100

Monthly Cash Flow

monthly_cash_flow = annual_pre_tax_cash_flow / 12

Simple Payback Period

payback_years = annual_pre_tax_cash_flow > 0 ? total_cash_invested / annual_pre_tax_cash_flow : 0

Variables

VariableDescriptionDefault
annual_pre_tax_cash_flowAnnual Pre-Tax Cash Flow(USD)7200
total_cash_investedTotal Cash Invested(USD)75000

How It Works

Cash-on-Cash Return

Cash-on-cash (CoC) return measures the yield on the actual cash you put into a deal, reflecting the impact of leverage.

Formula

CoC Return = Annual Pre-Tax Cash Flow / Total Cash Invested x 100

Cash Invested Includes

  • Down payment
  • Closing costs
  • Initial repairs and improvements
  • Any cash reserves required by the lender

    • Worked Example

    An investor puts $75,000 total cash into a deal and receives $7,200 annual pre-tax cash flow.

    annual_pre_tax_cash_flow = 7200total_cash_invested = 75000
    1. 01Cash-on-cash return: $7,200 / $75,000 x 100 = 9.60%
    2. 02Monthly cash flow: $7,200 / 12 = $600
    3. 03Simple payback period: $75,000 / $7,200 = 10.4 years

    Ready to run the numbers?

    Open Cash-on-Cash Return Calculator