Cash-on-Cash Return Calculator
Estimate annual pre-tax cash flow and compare returns with and without a maintenance reserve.
Down payment, closing costs and initial repairs.
Exclude mortgage principal and interest and the separate maintenance reserve below. Avoid counting a reserve twice.
Principal and interest only. Count taxes and insurance as operating expenses, not twice.
Without maintenance reserve
Estimated annual pre-tax cash flow
$10,800.00
Estimated cash-on-cash return
18%
With maintenance reserve
Estimated annual pre-tax cash flow
$8,400.00
Estimated cash-on-cash return
14%
How cash-on-cash return is estimated
Annual pre-tax cash flow = (monthly rent − monthly operating expenses − monthly mortgage payment − optional monthly maintenance reserve) × 12. Cash-on-cash return = annual pre-tax cash flow ÷ total cash invested × 100. The comparison without a reserve leaves that deduction out.
Setting aside a reserve reduces available cash but does not mean the money has already been spent. This estimate excludes income taxes, appreciation, equity growth and sale proceeds. Vacancy, one-time costs, financing terms and actual repair timing can materially change the result. It is a planning estimate, not an investment recommendation.
For planning only. Not financial, tax or investment advice.