REDOSFree Cash-on-Cash Return Calculator
The only return that measures what your own money earned. Enter the deal and see it instantly. Free. No login.
The investment
The income
The loan
$1,062 a year on $52,300 of your own cash.
Weak — the numbers don't work yet.
Cash-on-cash 2.0% — weak for a rental.
How the return is built
You don't just need the numbers. You need to know what to fix.
Free calculators hand you a spreadsheet. REDOS reads your deal and tells you exactly where it's weak — and how to save it.
2.0% return on your cash (aim 8%+). Push the purchase price down or add income (unit, storage, laundry, pets).
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How to calculate cash-on-cash return
Cash-on-cash return is annual cash flow divided by the cash you actually put into the deal. It's the number that tells you what your own money earned — which is why it's the metric investors compare across deals, and across asset classes. A property can look cheap and still be a poor use of your capital.
- 1
Add up your real cash in
Down payment, closing costs, lender fees, rehab, and the reserves you had to set aside. Not the purchase price — only the money that left your account.
- 2
Calculate annual cash flow
Rent minus operating expenses minus the mortgage, times twelve. After reserves, not before.
- 3
Divide
Annual cash flow ÷ total cash invested. $4,000 a year on $50,000 invested is an 8% cash-on-cash return.
- 4
Compare honestly
Against your other options — another property, an index fund, paying down debt. Cash-on-cash is what makes those comparable.
One caveat worth knowing: cash-on-cash ignores appreciation, loan paydown, and tax benefits, so it understates the total return on a long-term hold. It also breaks down entirely on a BRRRR where you pull all your cash back out — with zero cash left in, the return is mathematically infinite. That's not a bug in the math; it's the whole point of the strategy.
Frequently asked questions
What is a good cash-on-cash return?
Most rental investors target 8% or better. Below about 5% you're taking on the work and risk of being a landlord for something a passive index fund might match — though a strong appreciation market can justify a lower number.
What's the difference between cash-on-cash and ROI?
Cash-on-cash counts only actual cash flow against actual cash invested, in a single year. Full ROI also includes appreciation, principal paydown, and tax benefits. Cash-on-cash is the stricter, more honest short-term measure.
What's the difference between cash-on-cash and cap rate?
Cap rate is NOI divided by the property's price and ignores financing entirely — it describes the property. Cash-on-cash divides by your cash and includes the mortgage — it describes your deal. Two investors can buy the same property at the same cap rate and get completely different cash-on-cash returns.
How does an all-cash purchase change it?
With no loan there's no mortgage payment, so cash flow is much higher — but you invested far more cash. All-cash deals usually show a lower cash-on-cash return and much better safety, since there's no debt to cover during a vacancy.
From the blog
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Run the numbers
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Whose number is that
DSCR, what the lender actually computes, and why it is not the number you calculated
You and your lender can run the same ratio on the same property and land in different places. The difference is which rent, which expenses and which payment each of you used.