cash on cash roi calculator - Aaron Graves, PhDude Replica

Cash on Cash Return Calculator

Estimate your annual pre-tax return based on the cash you actually invested in a rental property.

Purchase price ($)

Down payment ($)

Closing costs ($)

Rehab / upfront repairs ($)

Other initial costs ($)

Monthly rent income ($)

Other monthly income ($)

Vacancy rate (%)

Monthly operating expenses ($)

Monthly debt service ($)

What is cash on cash ROI?

Cash on cash ROI (sometimes called cash-on-cash return) is a real estate metric that measures how much annual pre-tax cash flow you earn relative to the cash you personally invested. It is especially useful when you use financing, because it focuses on your actual dollars in the deal rather than the full property value.

Investors often use this metric when screening rental properties, comparing deals in different markets, or deciding whether a refinance or renovation plan improved returns.

The formula

Cash on Cash ROI (%) = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100

In this calculator, annual pre-tax cash flow is estimated as:

Effective Gross Income (after vacancy)
Minus Annual Operating Expenses
Minus Annual Debt Service

Total cash invested includes your down payment, closing costs, rehab budget, and any other upfront cash costs.

How to use this calculator correctly

1) Enter realistic income assumptions

Use market-based rent, not best-case rent. If there are additional income streams (parking, laundry, storage), include those in other monthly income.

2) Don’t underestimate expenses

Operating expenses may include taxes, insurance, repairs, management, utilities paid by owner, HOA dues, and routine maintenance. Be conservative: optimistic numbers often lead to poor investment decisions.

3) Include vacancy

Even strong markets have turnover and occasional vacancy. A vacancy input of 3% to 8% is common, depending on property type and local demand.

4) Keep debt service separate

This tool subtracts debt service separately from operating costs, which mirrors standard underwriting logic and gives clearer insight into leverage effects.

What is a “good” cash on cash return?

There is no universal number, but rough guidelines are:

Below 5%: often too thin unless there is strong appreciation upside or very low risk.
5%–8%: common in stable or higher-priced markets.
8%–12%: strong for many buy-and-hold investors.
12%+: attractive on paper; verify assumptions carefully for hidden risk.

Your target should match your strategy, risk tolerance, property class, and market conditions.

Quick example

Suppose you invest $70,000 total cash and the property produces $8,400 in annual pre-tax cash flow.

Cash on Cash ROI = ($8,400 / $70,000) × 100 = 12.0%

That means your property is returning 12 cents of pre-tax cash flow per year for each dollar invested.

Common mistakes investors make

Ignoring capital expenditures (roof, HVAC, major replacements).
Using pro-forma rent that is above local comparable units.
Forgetting to include leasing and turnover costs.
Assuming self-management forever when long-term plans may require paid management.
Comparing leveraged and unleveraged deals without adjusting expectations.

Final thoughts

Cash on cash ROI is one of the most practical ways to evaluate rental property performance, especially for financed deals. It gives you a fast, investor-focused snapshot of how hard your invested cash is working. Pair it with cap rate, DSCR, market trends, and stress testing to make more durable investment decisions.