Cap Rate vs Cash-on-Cash - Same Deal, Two Returns

Cap rate and cash-on-cash both talk about “return,” but they answer different questions. Cap rate ignores your loan. Cash-on-cash lives on the cash you actually wrote the check for.

Cap rate first

Cap% = NOI ÷ purchase price. Build NOI on the NOI calculator, then run the cap rate calculator. Useful for comparing unlevered deals before you argue about down payments.

Cash-on-cash after the loan

CoC% = annual cash flow ÷ cash invested. Cash flow is NOI minus debt service. Use the cash-on-cash calculator, or put both metrics on one sheet with the cap rate vs cash-on-cash calculator.

What this guide is not

Not investment advice and not a substitute for your lender's DSCR rules. Higher CoC can mean higher risk — rate resets and vacancy still matter.