Cash-on-Cash Return & ROI Calculator
Cash-on-cash return shows what a year of cash flow pays on the cash you put in. A total ROI view adds principal paydown and appreciation.
Cash-on-Cash Return & ROI Calculator
Enter your numbers; the result appears here.
Have a question about your situation, want tips, or need a referral? Email the CLRC team at [email protected]. We share general information, not legal advice, and we’re not a law firm.
Annual cash flow = NOI − annual loan payments (principal + interest)
Cash-on-cash return = annual cash flow ÷ cash invested
Total first-year ROI = (cash flow + principal paid + appreciation) ÷ cash invested
How to use it
“ROI” means different things to different people. Cash-on-cash counts only the cash your property throws off in a year. Total ROI adds equity built by paying down the loan, and the appreciation you assume. Taxes, depreciation and selling costs are not included here; talk to a tax professional about those.
Worked example
Price $650,000, 20% down ($130,000), $15,000 closing and $5,000 rehab: cash invested $150,000. Loan $520,000 at 6.5% for 30 years: payments $39,441/year. NOI $23,980 − $39,441 = cash flow $-15,461. Cash-on-cash = $-15,461 ÷ $150,000 = -10.31%. Adding first-year principal paydown of $5,812 gives a total ROI of -6.43% with no appreciation.
Rent assumptions must respect the statewide rent cap and any local rent-control or just-cause rules. Use the free rent increase calculator and check your county page before you plan on a rent increase. Vacancy and turnover also depend on notice and deposit timing: see the notice date calculator and deposit calculator.
Frequently asked questions
What is a good cash-on-cash return?
It varies by market and risk. Compare it with what you could earn elsewhere, and with the risk of leverage.
Is appreciation included?
Only if you enter it. The default is 0%, so the total ROI shown is cash flow plus principal paid down.
Why does the loan payment matter so much?
Cap rate ignores financing. Cash-on-cash shows how your actual loan terms change what you keep.
Sources
- Civ. Code § 1947.12 (statewide rent cap)
- California Attorney General: limits on rent increases
- California DRE: Landlord-Tenant guide
This tool applies general California rules to the dates you enter. It cannot see your lease, your city’s ordinance or the facts of your situation. Check your local rent rules and consult a qualified attorney before you serve a notice or withhold a deposit. Read the disclaimer.