Real Estate Investing for Beginners: How to Calculate Cash on Cash Return in Real Estate

#RealEstateInvestingForBeginners #CashOnCashReturnRealEstate

In today’s video we are continuing our sequence on one of the most important concepts in real estate investing for beginners – cash on cash return.

If you are thinking of starting a rental property investing business in 2020 and need a little help, we are here to provide you with the needed support:

In our first video, we covered what is cash on cash return in real estate. You can watch here:

Today we are focusing on how to calculate cash on cash return in real estate to make profitable investment decisions every time.

Cash on cash return in rental property investing is the ratio between the annual net operating income and the total cash investment.

The annual net operating income, or the annual cash flow before tax, is calculated by subtracting all your rental expenses from your annual rental income.

You can calculate the annual rental income by multiplying your monthly rental income by twelve for the number of months in a year.

The rental expenses, or operating expenses, include utilities, insurance, property management, maintenance, and others.

After you have calculated your annual cash flow before tax, you have to divide it by the total cash investment that you made to get the cash on cash return of your rental property.

As you can imagine, your calculations will be significantly different depending on your financing method: cash vs. mortgage. We will discuss the differences between these two cases in our next video.

If you are a new investor and starting to get a little bit worried about obtaining all the necessary data and making all the calculations on your own, don’t panic.

Mashvisor’s tools ( have turned 3 months of research into 15 minutes, making real estate investing for beginners easier and more efficient than ever before. Just visit us on to find ready cash on cash return calculations for hundreds of thousands of properties for sale in all US real estate markets.

To learn more about what’s good cash on cash return in real estate investing in 2020, read

To find out the best places to invest in traditional and Airbnb rentals for high cash on cash return in 2020, read and respectively. #RealEstateInvesting #RentalPropertyInvesting

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