# Cash On Cash Return Calculator

**Introduction**

Calculating the cash on cash return is crucial for real estate investors to evaluate the profitability of their investments. A cash on cash return calculator simplifies this process, providing accurate results based on specific financial inputs.

**How to Use**

To utilize the cash on cash return calculator, enter the following details:

**Initial Investment**: The total amount of money invested upfront.**Annual Net Operating Income (NOI)**: The income generated from the property after subtracting operating expenses.**Financing Costs**: Any expenses related to financing, such as loan origination fees or closing costs.**Down Payment**: The initial payment made towards purchasing the property.

Click the “Calculate” button to obtain the cash on cash return percentage.

**Formula**

The formula for calculating cash on cash return is as follows:

**Example Solve**

Suppose an investor purchases a property for $200,000, with an annual net operating income of $25,000, financing costs of $5,000, and a down payment of $40,000.

*Cash* *on* *Cash* *Return* (%) =15.15%

**FAQs**

**Q: Why is cash on cash return important?**

**A:** Cash on cash return helps investors assess the profitability of their real estate investments by comparing the annual cash flow to the initial investment.

**Q: Can cash on cash return be negative?**

**A: **Yes, a negative cash on cash return indicates that the property is not generating enough income to cover the expenses and financing costs.

**Q: What factors can affect cash on cash return?**

**A:** Factors such as property expenses, rental income, financing terms, and market conditions can impact cash on cash return.

**Conclusion**

The cash on cash return calculator simplifies the evaluation process for real estate investments, providing investors with valuable insights into their potential profitability.