Rental Cash-on-Cash Return Calculator
Compare first-year rental cash with down payment, cash closing costs and other upfront cash, using gross rent, vacancy, cash costs and supplied loan terms.
What This Calculator Does
Estimate the first 12 operating months' rental cash as a percentage of all the cash you invest upfront. Include initial work, furnishing and reserve capital in addition to down payment and cash-paid closing costs. The calculation uses scheduled gross rent before vacancy/collection loss and your complete monthly cash budget. It is a nominal cash-on-cash yield before income tax, excluding appreciation and sale.
Who Is This For
For rental-property buyers, owners and real-estate professionals comparing a specific annual cash budget. Use the cash you actually invest upfront and supplied rent, loss, expense and loan assumptions. The result does not determine tax profit, lender eligibility or a guaranteed investment return.
How It Works
Enter the purchase price, down payment, closing costs paid in cash and other upfront cash. Then the full monthly rent, vacancy and all monthly costs, using 0 where it is zero. With a loan, add a fixed yearly rate and a 10, 15, 20, 25 or 30-year term; for a cash purchase, the down payment equals the price and no rate or term is needed. Tick the confirmation, then compare your total upfront cash, monthly and yearly cash flow and the yearly return.
Frequently Asked Questions
What does this rental return measure?
Rental cash over the first 12 operating months, after the entered vacancy loss, cash costs and loan principal/interest, divided by total upfront cash invested and multiplied by 100. The metric is annual cash-on-cash, not total property return, cap rate, IRR or income-tax profit. Appreciation, sale proceeds and equity from principal repayment are excluded. All amounts are nominal supplied scenarios, not a guaranteed yield or universal investment benchmark.
Why separate other upfront cash from closing costs?
Initial work, furniture and committed reserve capital can require your cash even when they are not closing costs. With illustrative price $500,000, down $100,000, closing $20,000, other upfront cash $30,000, gross rent $4,500, loss 5%, monthly costs $900 and a hypothetical 6.5% 30-year note, annual rental cash is about $10,160.73. On $150,000 upfront cash, yield is about 6.77%; omitting the $30,000 gives 8.47% on $120,000. Exclude financed costs, credited deposits and duplicates.
Should I enter gross rent or rent already collected?
Enter scheduled gross rent before vacancy and collection loss. For $4,500 gross and 5% loss, the allowance is $225 and effective monthly rent $4,275. Entering $4,275 already net and deducting 5% again would reduce it to $4,061.25 incorrectly. Count the loss once and keep it out of cash expenses. A confirmed 0 gross rent or 0% loss is allowed; a blank field is not a supplied zero.
How is an all-cash purchase treated?
Enter the full purchase price as down payment. Loan principal and payments are 0; rate and amortization term are not applicable. For illustrative $500,000 cash price, $20,000 closing, $30,000 other upfront cash, $4,500 gross rent, 5% loss and $900 monthly costs, annual cash is $40,500 on a $550,000 basis, about 7.36%. Cash does not automatically make this cap rate: upfront cash and cash allowances can differ from a price-and-NOI measure.
Why is no return shown when I put in no upfront cash?
Cash-on-cash return divides by your upfront cash, so with none there's nothing to divide by, even when the rent leaves cash over. Example: a $500,000 purchase fully financed with no closing or other upfront cash, 6.5% over 30 years, $4,500 rent, 5% vacancy and $900 of costs leaves about $2,575.92 a year, but no return percentage. It is not 0% and not unlimited. Look at the cash flow on its own. This example doesn't mean zero-down financing or zero closing costs are available.
How do negative cash flow and exact zero differ?
With upfront cash, negative yearly cash flow gives a negative return and means you'll need to add money. Cash flow of exactly 0 gives a return of 0%. Example: a $300,000 price, $60,000 down, $10,000 closing, $5,000 other cash, a 0% 10-year loan, $3,000 rent, no vacancy and $1,000 of costs: the $2,000 loan payment leaves $0 cash flow, so the return is 0% on $75,000. A 0% rate is only a test value, not a market quote. The label uses the exact cash flow, not a rounded $0 on screen.
Which expenses and reserves belong in the cash budget?
Include applicable property tax, home/wind/flood insurance, mortgage insurance, association dues, repairs, management and actual ongoing reserve/cash allowances once. Exclude modeled principal/interest, vacancy already deducted and upfront capital again. A reserve committed upfront enlarges the capital basis; it is not automatically a monthly expense. The before-loan cash subtotal uses these supplied allowances and is not normalized accounting or lender NOI. Tax deductibility and reserve adequacy are not assessed.
Does the loan term change the return period or precision?
The return always covers the first 12 months; 15 or 30 years is the loan term, which changes the loan payment, not the investment period. Payments use the fixed note rate calculated precisely, not the APR or a lender's rounded statement. Yearly cash flow and the return use exact values; don't multiply a rounded monthly figure, or a yearly percentage by the loan years, to claim a lifetime return. There is no partial-year adjustment, rent growth, sale, inflation, NPV/IRR, tax calculation or lender review.