# Cash-on-Cash Return Calculator

> Computes a rental property's annual pre-tax cash flow after operating expenses and debt service, and divides it by the cash invested (down payment, closing costs, repairs) to get the cash-on-cash return.

- Calculator id: `cash-on-cash-return` · Category: Investing & Real Estate (`investing`) · Tool name: `calculate_cash_on_cash_return`
- Canonical page: https://tttkmbb.com/investing/cash-on-cash-return · This document: https://tttkmbb.com/investing/cash-on-cash-return.md · JSON definition: https://tttkmbb.com/investing/cash-on-cash-return.json

## Purpose

Computes a rental property's annual pre-tax cash flow after operating expenses and debt service, and divides it by the cash invested (down payment, closing costs, repairs) to get the cash-on-cash return.

**Use when:** You financed a rental property and want the yield on the actual cash you put in, including the effect of the mortgage.

**Do not use when:** You want an unlevered, financing-independent comparison (use cap-rate) or a total return including appreciation and principal paydown. Informational only; not financial advice.

## Input

| Parameter | Type | Unit | Required | Description |
| --- | --- | --- | --- | --- |
| `cash_invested` | number |  | required | Down payment plus closing costs, initial repairs and other upfront cash. (> 0, max 1000000000000) |
| `annual_rental_income` | number |  | required | Rent and other income actually collected per year. (min 0, max 1000000000000) |
| `annual_operating_expenses` | number |  | required | Taxes, insurance, maintenance, management, utilities and vacancy allowance per year. (min 0, max 1000000000000) |
| `annual_debt_service` | number |  | optional, default 0 | Total mortgage payments (principal + interest) per year; 0 for an all-cash purchase. (min 0, max 1000000000000) |

## Output

| Field | Type | Unit | Description |
| --- | --- | --- | --- |
| `net_operating_income` | number |  | annual_rental_income − annual_operating_expenses. |
| `annual_cash_flow` | number |  | net_operating_income − annual_debt_service. |
| `monthly_cash_flow` | number |  | annual_cash_flow / 12. |
| `cash_on_cash_return_percent` | number | % | annual_cash_flow / cash_invested × 100. |

## Formula

`annual_cash_flow = annual_rental_income − annual_operating_expenses − annual_debt_service; cash_on_cash_return_percent = annual_cash_flow / cash_invested × 100`

First-year, pre-tax cash yield; it ignores appreciation, loan principal reduction, depreciation tax benefits and the sale. Informational mathematics only; not financial advice.

## Data Sources

- Wikipedia – Cash on cash return — https://en.wikipedia.org/wiki/Cash_on_cash_return (reference, retrieved 2026-09-24)
- Wikipedia – Capitalization rate — https://en.wikipedia.org/wiki/Capitalization_rate (reference, retrieved 2026-09-24)

Data freshness: `static`. Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output.

## API

- `GET https://tttkmbb.com/api/v1/calculate/cash-on-cash-return?cash_invested=…&annual_rental_income=…&annual_operating_expenses=…`
- `POST https://tttkmbb.com/api/v1/calculate/cash-on-cash-return` with JSON body `{"inputs": {…}}`
- Response: unified envelope (`success`, `request`, `result.values`, `result.units`, `sources`, `freshness`, `timestamp`, `next_actions`, `links`); see https://tttkmbb.com/docs/response-format.md
- Schema: https://tttkmbb.com/api/v1/calculators/cash-on-cash-return · OpenAPI operationId `calculate_cash_on_cash_return` in https://tttkmbb.com/openapi.json
- Authentication: none. Rate limit: fair use, see https://tttkmbb.com/docs/rate-limits.md.

## MCP

- Server: `https://tttkmbb.com/mcp` (Streamable HTTP, JSON-RPC 2.0, no auth)
- Tool:  `run_calculator` with `{"calculator_id": "cash-on-cash-return", "inputs": {…}}`

## Example

- 60,000 invested, 24,000 rent, 8,000 expenses, 12,000 debt service: inputs `{"cash_invested":60000,"annual_rental_income":24000,"annual_operating_expenses":8000,"annual_debt_service":12000}` → `{"net_operating_income":16000,"annual_cash_flow":4000,"monthly_cash_flow":333.33,"cash_on_cash_return_percent":6.67}`
- All-cash 200,000 purchase, 18,000 rent, 5,000 expenses: inputs `{"cash_invested":200000,"annual_rental_income":18000,"annual_operating_expenses":5000}` → `{"annual_cash_flow":13000,"monthly_cash_flow":1083.33,"cash_on_cash_return_percent":6.5}`

```
GET https://tttkmbb.com/api/v1/calculate/cash-on-cash-return?cash_invested=60000&annual_rental_income=24000&annual_operating_expenses=8000&annual_debt_service=12000
```

## Limitations

You want an unlevered, financing-independent comparison (use cap-rate) or a total return including appreciation and principal paydown. Informational only; not financial advice. First-year, pre-tax cash yield; it ignores appreciation, loan principal reduction, depreciation tax benefits and the sale. Informational mathematics only; not financial advice. All values are computed from the formula above; no measurement or live data is involved.

## FAQ

**How does this differ from the cap rate?**

The cap rate divides NOI by the full price and ignores the mortgage; cash-on-cash subtracts debt service and divides by only the cash you invested, so leverage can push it above or below the cap rate.

**Should the principal part of the mortgage count as an expense?**

For cash-on-cash yes, because it leaves your pocket in the year; it does build equity, which a total-return measure would add back.

## Related

- [Cap Rate Calculator](https://tttkmbb.com/investing/cap-rate.md) — Unlevered yield on the property price.
- [Mortgage Payment Calculator](https://tttkmbb.com/finance/mortgage-payment.md) — Compute the annual debt service from the loan terms.
- [ROI Calculator](https://tttkmbb.com/finance/roi.md) — Total return including the sale proceeds.