Property / Investing
Cash-on-Cash Return Calculator with Mortgage and 10-Year Cash Flow
Enter the price, down payment, closing costs, mortgage, rent, vacancy, and costs to get a rental property's yearly cash flow and cash-on-cash return, then follow rent, net operating income, mortgage payments, and cash flow year by year for ten years.
Cash-on-Cash Return Calculator with Mortgage and 10-Year Cash Flow: Cash invested is the down payment plus closing costs: 25% of 400,000 plus 12,000 is 112,000. A 300,000 loan at 6.5% over 30 years costs 22,754 a year. With 23,400 of net operating income, the cash flow is 646, a cash-on-cash return of 0.58%; with rent and costs both growing 3% a year, it improves each year. Runs 100% locally in your browser with zero server file uploads.
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| Year | Rent | Net operating income | Mortgage | Cash flow | Cash on cash |
|---|---|---|---|---|---|
| 1 | 36,000 | 23,400 | 22,754 | 646 | 0.6% |
| 2 | 37,080 | 24,102 | 22,754 | 1,348 | 1.2% |
| 3 | 38,192 | 24,825 | 22,754 | 2,071 | 1.8% |
| 4 | 39,338 | 25,570 | 22,754 | 2,815 | 2.5% |
| 5 | 40,518 | 26,337 | 22,754 | 3,582 | 3.2% |
| 6 | 41,734 | 27,127 | 22,754 | 4,373 | 3.9% |
| 7 | 42,986 | 27,941 | 22,754 | 5,186 | 4.6% |
| 8 | 44,275 | 28,779 | 22,754 | 6,025 | 5.4% |
| 9 | 45,604 | 29,642 | 22,754 | 6,888 | 6.1% |
| 10 | 46,972 | 30,532 | 22,754 | 7,777 | 6.9% |
Cash-on-cash return is a year's cash flow before tax ÷ the cash you put in: the down payment plus closing and repair costs. Cash flow is the rent you collect less operating costs and mortgage payments. It ignores the loan being paid down and any change in the property's value, which add to your total return, and income tax, which reduces it.
Leverage
With the example property's cap rate of 5.85% and a mortgage at 6.5%, every borrowed dollar costs more than it earns. At a 4.5% rate, the same purchase returns about 4.6% on the cash in year one, against 0.58% at 6.5%.
The mortgage itself
To see how each payment splits into interest and principal, and how fast the balance falls, use the loan amortization calculator.
How to use it
- Enter the price, down payment, closing costs, and mortgage terms.
- Enter the rent, vacancy, and yearly costs, and how fast rent and costs grow.
- Read the first year's return and the ten-year table.
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Everything is calculated in your browser.
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Frequently asked questions
What is a good cash-on-cash return?
Many investors aim for 8 to 12%, but it depends on interest rates and how much they expect the property to rise in value; a low or negative return can still make sense where prices are growing.
Why is the return so low with a mortgage?
When the mortgage rate is above the property's cap rate, borrowing reduces the return on your cash, which is called negative leverage. A larger down payment or a lower rate improves it.
What does it leave out?
The loan being paid down, changes in the property's value, and income tax: the first two add to your total return, the last reduces it.
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