Acquisition · Returns
Cash-on-cash return calculator.
Annual cash flow ÷ total cash invested = your real yield. Tier-classified against the 2/5/8% buyer benchmarks.
Inputs
Cash-on-cash return
6.67%
Good — solid return for an STR investor
Tier reference
- ≥ 8.00% — excellent
- 5.00 – 8.00% — good
- 2.00 – 5.00% — marginal
- < 2.00% — reject
How it works
Cash-on-cash return is a year-1 yield on cash deployed. The formula is simple — annual cash flow ÷ total cash invested — but the inputs are where deals get evaluated honestly.
How to use this calculator
- Annual cash flow = Year 1 NOI − Year 1 debt service. (Use realistic, not aspirational, NOI.)
- Total cash invested = down payment + closing + furnishing + reserves + ramp-up carry. The Year 1 Cash Needs calculator builds this for you.
- Read the tier. If it's "marginal" or worse, the deal probably needs renegotiation or a better market.
FAQ
What is a good cash-on-cash return for an Airbnb?
8% or higher is the bar serious STR investors use. 5–8% is good. 2–5% is marginal — you may be doing the work of an operator for the return of an index fund.
Should I include appreciation in cash-on-cash?
No. Cash-on-cash is cash-yield only. Total return adds appreciation, mortgage paydown, and tax benefits — different metric.
Why does the calculator subtract debt service?
Cash flow is what hits your bank account after the mortgage. NOI minus debt service is the residual you live on (or reinvest).
How does this differ from cap rate?
Cap rate is unlevered (NOI ÷ price). Cash-on-cash is levered (cash flow ÷ cash invested). Two different lenses on the same deal.
Read the deep-dives
-
Cash-on-cash return: what good numbers look like for STRs in 2026
8%? 12%? 18%? Realistic CoC return benchmarks for short-term rentals in 2026, plus the line items most buyers miss when calculating.
Read · 5 min
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Why homeowners insurance won't cover your Airbnb — and what does
Standard HO-3 policies exclude STR use. AirCover is a backstop, not coverage. The four policy types that actually cover short-term rentals, and what each one costs.
Read · 5 min
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