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Rental Property Cash-on-Cash Return Calculator

Evaluate rental property returns and cash flow with cap rate and cash-on-cash metrics.

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Cash-on-cash return (annual %)

-9.3%

Annual cash return on your $92,000 investment.

Detailed results
Cap rate (NOI / price)4.3%
Annual cash flow-$8,528
Monthly cash flow-$711
Gross rent multiplier13.3

What this result means

Cash-on-cash return (annual %): -9.3%.

Cash-on-cash return: -9.3%. Cap rate: 4.3%. Monthly cash flow: $-711.

Annual Property Performance

Year 1 income, expenses, and cash flow breakdown.

Annual Property Performance. 11 rows, first 11 shown.
Line ItemAmount% of Gross Rent
Gross rental income$30,000100%
Vacancy loss$1,5005%
Effective gross income$28,50095%
Property tax$4,00013.3%
Insurance$1,2004%
Maintenance$4,00013.3%
Management fee$2,2808%
HOA/other$0.000%
NOI$17,02056.7%
Debt service (annual)$25,54885.2%
Cash flow-$8,528-28.4%

How this is calculated

NOI = Gross Rent − Vacancy − Operating Expenses. Cap Rate = NOI / Purchase Price. Cash-on-Cash = Annual Cash Flow / Total Investment. GRM = Price / Annual Rent.

Rental property returns are measured by cap rate (income yield) and cash-on-cash return (cash profit on actual money invested).

Cap Rate. Net Operating Income (NOI) ÷ purchase price. A 5% cap means you're earning 5% annually on the property value from operations. Cap rates vary by market and property quality; 4–8% is typical.

Cash-on-Cash Return. Annual cash flow ÷ total money invested (down payment + closing + rehab). This is the real return on your out-of-pocket dollars. A 10% cash-on-cash return beats most stock market returns.

The difference. Cap rate reflects the property's income-earning power. Cash-on-cash reflects your leverage (how much you borrowed). A property with a 5% cap can generate 10%+ cash-on-cash if you put 20% down and finance the rest.

Cash flow is king. A property with high cap rate but high debt service can have negative cash flow (you lose money monthly). Conversely, lower-cap-rate properties with low debt service generate positive cash flow. Choose based on your goals: appreciation vs. income.

The risk. Negative cash flow means you're subsidizing the investment monthly—risky if you have other expenses. Vacancy rates, maintenance surprises, and management fees often exceed estimates. Plan conservatively.

Assumptions

  • Vacancy rate is a percentage applied to gross rent; actual vacancies vary.
  • Maintenance is estimated as a percentage of purchase price; actual costs vary by property age and market.
  • Management fee is a percentage of rent; if self-managing, use 0%.
  • Mortgage payment is fixed throughout the loan term (no ARM).
  • No appreciation or depreciation modeled; calculator focuses on cash flow, not long-term wealth.

Frequently asked questions

›What's a good cap rate?

4–8% is typical; 3–4% in high-demand markets, 8–12% in lower-demand areas. Higher cap rates usually mean lower appreciation potential. Your goal determines the ideal rate: income-focused investors prefer 6%+, appreciation-focused investors accept 3–4%.

›Should I aim for positive cash flow month-one?

Ideally yes. Negative cash flow means you're losing money monthly on top of mortgage payments. However, some investors accept negative cash flow early if expecting strong appreciation. This is risky and requires reserves.

›How do I estimate vacancy rate?

Use historical data for the area and property type. Urban markets often have 3–5% vacancy, rural or weak markets 5–10%. Over-estimate to be conservative; budget 5% unless data suggests otherwise.

›Should I self-manage or hire a property manager?

Self-managing saves 8–10% of rent but costs your time (tenant issues, maintenance calls, repairs). A manager handles it, but you lose 8–10%. Run the numbers: if monthly cash flow is under $500, self-managing might make sense. Above that, a manager is worth it.

›What if I plan to flip the property, not rent it?

This calculator focuses on cash flow from rental income. For flipping, you'd track purchase price, renovation costs, expected sale price, and holding time. The ROI depends on sale price and speed, not monthly cash flow.

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