Cash-on-Cash Return Formula (With Examples)
The exact cash-on-cash formula Realy uses on Zillow listings—annual cash flow divided by total cash invested—with step-by-step examples for financed rental deals.
Cash-on-cash return (CoC) is the metric most buy-and-hold investors watch closest. It measures how hard your actual cash is working after you finance the property—not how the asset performs on an all-cash basis.
The Formula
Realy calculates cash-on-cash as:
Annual Cash Flow = NOI − Annual Mortgage Payment
Cash-on-Cash Return = Annual Cash Flow ÷ Total Cash Invested
Where:
Total Cash Invested = Down Payment + Closing Costs + Renovation
NOI = Effective Gross Income − Operating Expenses
Monthly cash flow is simply Annual Cash Flow ÷ 12.
What Goes Into "Total Cash Invested"
Realy's engine breaks down upfront cash as:
| Component | Default in Realy |
|---|---|
| Down payment | 20% of purchase price |
| Closing costs | 1% of sales price |
| Renovation | $0 (customizable per sqft or lump sum) |
You can change any assumption from the calculator icon in the extension or on Realy.app—settings sync across tabs.
Example 1: Standard Financed Rental
Property: $240,000 list price · $2,100/mo rent · 30-year loan at 6.5% · 20% down
| Step | Calculation | Result |
|---|---|---|
| Down payment (20%) | $240,000 × 0.20 | $48,000 |
| Closing costs (1%) | $240,000 × 0.01 | $2,400 |
| Total cash invested | $50,400 | |
| Loan amount | $240,000 − $48,000 | $192,000 |
| Annual NOI (est.) | Rent − taxes − expenses | ~$18,500 |
| Annual mortgage (P&I) | Amortized 30Y @ 6.5% | ~$14,560 |
| Annual cash flow | NOI − mortgage | ~$3,940 |
| Cash-on-cash | $3,940 ÷ $50,400 | ~7.8% |
Mortgage payment uses standard amortization: monthly rate = annual rate ÷ 12, then P&I over the loan term—the same logic in calculateMonthlyMortgage inside Realy's calculation engine.
Example 2: Low-Price, High-Yield Market
Property: $69,000 · $1,672/mo rent · same financing defaults
| Metric | Value |
|---|---|
| Total cash down | ~$14,490 |
| Annual cash flow | ~$14,497 |
| Cash-on-cash | ~100% |
Extreme CoC often appears on sub-$100K deals when expenses are minimally modeled. Always add insurance, vacancy, and maintenance before treating triple-digit CoC as realistic. See When a high cap rate is a trap.
Example 3: Cash Purchase
Set loan duration to Cash in Realy assumptions:
Annual Cash Flow = NOI (no mortgage)
Cash-on-Cash = NOI ÷ (Purchase Price + Closing Costs + Renovation)
CoC converges toward cap rate on all-cash deals—useful for comparing unlevered returns.
CoC vs Cap Rate
| Metric | Includes debt? | Best for |
|---|---|---|
| Cap rate | No | Comparing properties, all-cash view |
| Cash-on-cash | Yes | Measuring return on your money |
Read the full comparison: Cap rate vs cash-on-cash return.
Run CoC on Every Zillow Listing
Realy surfaces cash-on-cash on Zillow search pages, listing detail panels, and the full analytics view—using your assumption profile across every property.
Sort your next Dallas search by CoC and skip the spreadsheet entirely.