What Is Cash-on-Cash Return?

Cash-on-cash return (CoC) is the single most honest number in rental real estate: it tells you the actual cash you earn each year as a percentage of the actual cash you put in. Unlike cap rate, it accounts for your mortgage — so it reflects what really lands in your pocket.

The formula

Annual cash flow = rent − operating expenses − mortgage payments, for the year. Total cash invested = down payment + closing costs + any upfront rehab.

What's a good cash-on-cash return?

• 8–12% — a solid, healthy rental in most markets.
• 12%+ — strong, often from leverage or value-add.
• Under 5% — you're betting on appreciation, not cash flow.

Cash-on-cash vs. cap rate

Cap rate ignores financing — it's the return if you paid all cash. Cash-on-cash includes your mortgage, so it shows the leveraged, real-world return. Smart investors look at both: cap rate to compare properties apples-to-apples, cash-on-cash to see their actual yield.

Run it instantly

PropVision calculates cash-on-cash return (plus cap rate, cash flow, and a verdict) on any address in seconds — no spreadsheet.