Cash flow divided by cash invested
Cash-on-cash return is annual pre-tax cash flow divided by the cash you put into the deal. Cash flow is net operating income minus annual mortgage principal and interest. Cash invested is down payment plus closing costs plus rehab, not the purchase price. Cap rate is unlevered NOI over value; rental yield starts from scheduled rent.
Cash-on-cash return = annual pre-tax cash flow ÷ total cash invested
DSCR = NOI ÷ annual debt service
Monthly cash flow = annual cash flow ÷ 12
Example
$30,000 of NOI, $18,000 of annual debt service, and $60,000 of cash invested produces $12,000 of pre-tax cash flow, a 20% cash-on-cash return, a 1.667× DSCR, and $1,000 a month. An all-cash purchase with $0 of debt service reports cash-on-cash as NOI ÷ cash invested and leaves DSCR blank.
What this return leaves out
Income tax, depreciation, selling costs, and a change in loan balance sit outside pre-tax cash-on-cash. Two properties with the same return can still differ in reserves, vacancy, and capex. Enter NOI and debt service you already know; this page does not rebuild a full rental worksheet.