What Is a Good Cash-on-Cash Return in 2026?
Realistic cash-on-cash benchmarks for rental investors in 2026—how rates, insurance, and market type affect targets, and how to measure CoC on Zillow with Realy.
"What CoC should I target?" is the most common question new rental investors ask. In 2026—with investor mortgage rates still elevated vs. the early 2020s—the honest answer is: higher than you needed five years ago, and lower than spreadsheet fantasy numbers suggest.
The Formula (Quick Refresher)
Realy calculates:
Cash-on-Cash = Annual Cash Flow ÷ Total Cash Invested
Annual Cash Flow = NOI − Annual Mortgage
Total Cash Invested = Down Payment + Closing Costs + Renovation
See the full walkthrough: Cash-on-cash return formula.
2026 Benchmark Ranges
These are screening targets, not guarantees:
| Investor profile | Typical CoC target | Notes |
|---|---|---|
| Conservative / turnkey | 6–8% | Stable markets, professional mgmt |
| Balanced buy-and-hold | 8–12% | Most active rental investors |
| Cash-flow focused | 12–18%+ | Often lower-price markets, more mgmt |
| Value-add / BRRRR | Variable | Pre-refi CoC low; post-refi CoC matters |
In high-appreciation coastal markets, some investors accept 4–6% CoC if equity growth compensates. In cash-flow markets (parts of Texas, Ohio, Indiana), sub-8% CoC may not justify the hassle.
What Changed in 2026 vs. 2021
| Factor | Impact on CoC |
|---|---|
| Higher mortgage rates (~6–7% investor loans) | ↓ CoC (more debt service) |
| Insurance premiums (esp. TX, FL) | ↓ CoC (higher OpEx) |
| Rent growth (moderating in many metros) | Mixed |
| More investor competition on Zillow | ↓ margins on obvious deals |
Realy defaults to 6.5% interest and 2% property tax—update to your actual rate quote before comparing deals.
Example: Same Property, Different Assumptions
$180,000 purchase · $2,400/mo rent · 20% down · 30Y loan
| Scenario | Rate | Insurance | Vacancy | Approx. CoC |
|---|---|---|---|---|
| Optimistic | 6.5% | $0 | 0 mo | ~35%+ |
| Realistic | 7.0% | $1,400/yr | 1 mo | ~18–22% |
| Conservative | 7.5% | $1,800/yr | 1 mo + 8% mgmt | ~12–15% |
The gap between "Zillow extension default" and "real world" is why experienced investors customize assumptions on every deal.
CoC Hurdle Rate Framework
Set your minimum CoC based on:
- Alternative returns — Could this cash earn 10% in an index fund with zero tenants?
- Risk premium — Illiquid asset, vacancy, repairs → require extra yield.
- Time cost — Self-managing vs. paying 8–10% management.
- Strategy — BRRRR may accept low initial CoC for equity capture.
Write your hurdle rate down. Filter Zillow listings in Realy that fail it before booking showings.
Red Flags When CoC Looks Too Good
CoC above 25–30% on listed properties often means:
- Expenses not fully modeled (see high cap rate traps)
- Rent estimate too high
- Property condition issues depressing price
- Tax or title complications
If it looks too good, dig until you know why.
Measure CoC on Zillow in Seconds
- Install Realy for Chrome.
- Set your 2026 assumptions (rate, insurance, vacancy, mgmt).
- Open any Zillow search → Open Realy Analyzer.
- Sort by cash-on-cash; shortlist deals above your hurdle.
Related: Cap rate vs cash-on-cash · Top 10 Dallas listings by CoC