Calculator Coc

Cash on Cash Return (CoC) Calculator

Total rental income minus expenses and debt service.

Down payment + closing costs + rehab costs.

Your Cash on Cash Return:

0.00%

function calculateCoC() { var annualFlow = document.getElementById("annualCashFlow").value; var totalCash = document.getElementById("totalInvested").value; var resultDiv = document.getElementById("cocResultWrapper"); var resultValue = document.getElementById("cocResultValue"); var interpretation = document.getElementById("cocInterpretation"); if (annualFlow === "" || totalCash === "" || parseFloat(totalCash) = 12) { interpretation.innerHTML = "Excellent! This is generally considered a high-performing investment."; } else if (coc >= 8) { interpretation.innerHTML = "Strong performance. This meets the standard benchmark for many real estate investors."; } else if (coc > 0) { interpretation.innerHTML = "Positive return, but may be lower than market averages for high-risk assets."; } else { interpretation.innerHTML = "Negative cash flow. The property is currently costing you more than it generates."; } }

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Understanding the Cash on Cash (CoC) Return

In real estate investing, the Cash on Cash Return (often abbreviated as CoC) is a crucial metric used to determine the cash income earned on the actual cash invested in a property. Unlike ROI, which looks at the total return (including equity build-up and appreciation), CoC focuses strictly on the physical cash flow relative to the money you physically pulled out of your bank account.

How to Calculate Cash on Cash Return

The formula for CoC is relatively simple, but accurate data entry is required for a meaningful result:

CoC Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100

Key Components Explained

• Annual Pre-Tax Cash Flow: This is your gross rental income minus all operating expenses (taxes, insurance, repairs, property management) and minus your annual mortgage payments (debt service).
• Total Cash Invested: This includes every dollar you spent to get the property operational. It typically covers the down payment, closing costs, loan points, and initial renovation or rehab costs.

Why Use a CoC Calculator?

Investors use this calculator to compare different investment opportunities. For example, if you have $50,000 to invest, you might compare a property that yields 10% CoC versus a stock market index fund yielding 7%. It helps in understanding the leverage effect; by using a mortgage, you can often achieve a higher CoC return than if you paid for a property in full with cash.

Example Scenario

Imagine you purchase a rental property for $200,000. Your costs are as follows:

• Down Payment: $40,000
• Closing Costs & Repairs: $10,000
• Total Cash Invested: $50,000

After paying the mortgage, taxes, and insurance, the property generates $400 in net profit every month. Your annual cash flow is $4,800 ($400 x 12). Using the calculator:

($4,800 / $50,000) × 100 = 9.6% Cash on Cash Return

What is a Good CoC Return?

While "good" is subjective, many professional real estate investors aim for a 8% to 12% CoC return. In high-appreciation markets (like coastal cities), investors might accept a lower CoC (2-5%) because they expect the property value to skyrocket. In "cash flow" markets (like the Midwest), investors typically demand higher CoC returns to compensate for slower appreciation.