Cash on Cash Rate Calculator

A "Cash on Cash Rate Calculator" is a tool used in real estate investing to evaluate the return on investment (ROI) based on the amount of cash invested in a property.

The Cash on Cash Rate is a metric that helps investors assess the profitability of a real estate investment by comparing the annual pre-tax cash flow to the initial cash investment.

The formula to calculate the Cash on Cash Rate is:

Cash on Cash Rate = (Annual Pre-Tax Cash Flow / Total Cash Invested) x 100%

Where:

- Annual Pre-Tax Cash Flow is the net operating income generated by the property after deducting operating expenses but before taxes.

- Total Cash Invested represents the initial cash investment made in the property, including down payment, closing costs, and any other upfront expenses.

By inputting the values of the annual pre-tax cash flow and the total cash invested into the calculator, users can determine the Cash on Cash Rate as a percentage.

This metric helps investors understand how much return they are earning on the cash they have invested in a real estate property.

A Cash on Cash Rate Calculator is a valuable tool for real estate investors to analyze the potential returns of a property investment and make informed decisions about whether a particular investment aligns with their financial goals and expectations.