Guide
Cap Rate vs Cash-on-Cash Return
Cap rate compares NOI to purchase price without debt. Cash-on-cash measures annual cash flow against cash invested, so financing changes the story.
Real Estate CalculatorsIncludes Cap Rate Calculator
Side-by-side comparison
Cap rate = NOI ÷ price. Useful for comparing properties at similar leverage.
Cash-on-cash = annual pre-tax cash flow ÷ total cash invested (down payment, closing, reserves).
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Frequently asked questions
Can cap rate look good while cash-on-cash is negative?
Yes. High debt service can create negative cash flow even when NOI supports a moderate cap rate.
Educational only—not investment advice. Verify assumptions with local professionals.
Last reviewed: 2026-06-02