How it works
Cap rate = NOI / Purchase Price. Cash-on-cash = (NOI - Debt Service) / Cash Invested. The gap shows leverage amplification. Investing is how you make your money work for you. While saving protects your money from inflation, investing grows it. The stock market has returned an average of 10 percent per year over the past century, though returns vary significantly year to year. The key to capturing these returns is time in the market — not timing the market. Investing is how you make your money work for you. While saving protects your money from inflation, investing grows it. The stock market has returned an average of 10 percent per year over the past century, though returns vary significantly year to year. The key to capturing these returns is time in the market — not timing the market. Investing is how you make your money work for you. While saving protects your money from inflation, investing grows it. The stock market has returned an average of 10 percent per year over the past century, though returns vary significantly year to year. The key to capturing these returns is time in the market — not timing the market.
Tips
- Start with the default values to see a baseline result, then change one input at a time to understand which factor matters most for your outcome.
- Replace every default with your actual number — estimates and rules of thumb produce estimates, not answers. Pull your real figures from pay stubs, statements, or account dashboards.
- Use a conservative return rate (5-6% rather than the historical 10%) for planning purposes. Markets have long flat stretches, and planning on the average sets you up for a shortfall.
Frequently asked questions
- What is the difference between cap rate and cash-on-cash?
- Cap rate measures return on the full property value (no leverage). Cash-on-cash measures return on your actual cash investment (with leverage). Cash-on-cash is typically higher when the mortgage rate is below the cap rate.
- How accurate are the calculator results?
- The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.
- What should I enter for purchase price?
- Enter your actual purchase price value. The default of 300000 dollars is a common starting point, but replace it with your real figure for an accurate result.