$800k property
-10.3% cash-on-cash
About -$16,464 annual cash flow on a $160,000 down payment.
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Mortgage calculator
Cash-on-cash return measures annual pre-tax cash flow against the cash you put into a rental property. It is useful for comparing financed deals because it includes the mortgage payment and down payment.
Scope
Canada mortgage planning estimate
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Cash-on-cash return ignores appreciation, mortgage principal paydown, depreciation, refinancing, and sale costs.
Cash-on-cash return is annual pre-tax cash flow divided by cash invested. In a $600,000 purchase with 20% down, $2,800 rent, $550 monthly expenses, 5% vacancy, and a 5% mortgage, annual cash flow is about -$8,184, so cash-on-cash return is about -6.8% before tax.
Verified: 2026-07-29 · Author: usecos.app Research & Engineering
Use the canonical URL for this page when referencing these facts. Figures are planning estimates and should be checked against the cited official sources and the calculator inputs.
Enter your own numbers here, then use the examples and notes below to check the result.
Evaluate true yield on out-of-pocket capital across Canadian investment strategies — accounting for acquisition friction, closing costs, and principal paydown.
| Strategy & Archetype | True Cash Invested | Net Annual Cash Flow | Cash-on-Cash (CoC) | Total Return on Cash | Verdict & Underwriting |
|---|---|---|---|---|---|
| Prairie Multi-Unit (High Yield)Edmonton / Regina Triplex | $148,000 20% down ($120k) + $18k closing + $10k reserve | +$11,400Cap rate: 6.4% | +7.7%Spendable cash | +15.5% ++7.8% principal | High Cash Flow Positive mortgage arbitrage: Cap rate exceeds debt cost. Produces immediate monthly dividend without reliance on market appreciation. |
| Suburban Detached Value-AddCalgary / Ottawa Single Family | $175,000 20% down ($130k) + $20k closing + $25k basement reno | +$3,850Cap rate: 5.1% | +2.2%Spendable cash | +8.7% ++6.5% principal | Balanced Wealth Neutral cash flow post-reno. Strong equity compounding (~$11,400/yr principal paydown) builds net worth safely. |
| Metro Core Condo (Negative Arbitrage)Toronto / Vancouver 1-Bed | $172,000 20% down ($140k) + $27k double LTT/legal + $5k reserve | -$6,960Cap rate: 3.6% | -4.0%Spendable cash | +1.7% ++5.7% principal | Appreciation Speculation Negative mortgage arbitrage: 5%+ mortgage rate exceeds 3.6% cap rate, creating cash drag. Requires 35%+ equity to break even. |
| Student Housing / Rooming HouseLondon / Waterloo / Kingston | $195,000 25% down ($165k) + $20k closing + $10k furnish | +$14,200Cap rate: 6.8% | +7.3%Spendable cash | +13.2% ++5.9% principal | High-Touch Income Elevated management overhead and turnover offset by exceptional per-room rental yield and positive debt coverage. |
Many amateur calculators divide cash flow by down payment alone. In Ontario or BC, land transfer tax, legal fees, and title insurance add $15,000–$30,000 of upfront cash. Including true cash invested prevents overestimating your actual return by 20–30%.
When mortgage borrowing rates (e.g. 5.0%) exceed a property’s un-leveraged cap rate (e.g. 4.0%), leverage creates negative carry. In this environment, cash-on-cash return will always be lower than the property cap rate.
| Scenario | Result | Interpretation |
|---|---|---|
| $800k property, $3,000 rent | -10.3% cash-on-cash | About -$16,464 annual cash flow on a $160,000 down payment. |
| $600k property, $2,800 rent | -6.8% cash-on-cash | About -$8,184 annual cash flow on a $120,000 down payment. |
| $400k property, $2,200 rent | -2.6% cash-on-cash | About -$2,052 annual cash flow on an $80,000 down payment. |
-10.3% cash-on-cash
About -$16,464 annual cash flow on a $160,000 down payment.
-6.8% cash-on-cash
About -$8,184 annual cash flow on a $120,000 down payment.
-2.6% cash-on-cash
About -$2,052 annual cash flow on an $80,000 down payment.
Cash-on-cash return = annual pre-tax cash flow / cash invested
Cash invested usually includes down payment, closing costs, immediate repairs, and any acquisition costs paid in cash.
| Metric | Formula | Use when |
|---|---|---|
| Cash-on-cash return | annual cash flow / cash invested | Compare returns on your actual cash. |
| Cap rate | NOI / price | Compare properties without financing. |
| DSCR | NOI / debt service | Check debt-service coverage. |
It is one type of ROI. It only measures pre-tax cash flow against cash invested, so it excludes appreciation, principal paydown, and eventual sale proceeds.
Yes for a real acquisition. Include land transfer tax, legal fees, inspection, appraisal, repairs, and other cash paid to close or stabilize the property.
This page uses the shared usecos calculator engine, visible methodology, and the source links below. Verified on 2026-07-29.