Cash-on-Cash Return Calculator for Michigan Rental Property

Cash-on-cash return tells you the return on the dollars you actually put into a Michigan deal — annual cash flow after the mortgage, divided by your down payment plus closing costs. Where cap rate ignores financing, cash-on-cash centers it. This calculator is pre-loaded with typical Michigan figures: a median home near $240,000, gross rent around $1,500/month, property tax near 1.54% and insurance near 1.30% of value. Adjust anything to match your deal.

The calculator computes annual and monthly cash flow, the cash-on-cash percentage, and the first-year equity you build through principal paydown. Everything runs in your browser — your numbers are never uploaded.

What is cash-on-cash return?

Cash-on-cash = annual pre-tax cash flow ÷ total cash invested. If you put $90,000 into a deal and it throws off $9,000 a year after the mortgage and expenses, your cash-on-cash is 10%. It is the closest metric to “what am I earning on the cash I actually spent?”

cash-on-cash = annual pre-tax cash flow ÷ total cash invested
total cash invested = down payment + closing costs
annual pre-tax cash flow = NOI − annual debt service

How Michigan numbers feed cash-on-cash

For the example above, annual property tax is roughly $3,696 (1.54% of $240,000) and insurance about $3,120 (1.30% of value). Michigan markets with a lower price-to-rent ratio tend to show higher cash-on-cash, because the same rent covers a smaller mortgage. The financing inputs (down payment %, rate, term) are left at their defaults — change them to match your actual loan.

Why we add first-year equity

Cash-on-cash only counts cash in your pocket — but each mortgage payment also pays down principal, building equity you recover on a sale or refinance. Adding first-year principal payback to cash flow gives a “year-1 total return” closer to your real economic return. See the glossary for related terms.

Frequently asked questions

What is a good cash-on-cash return in Michigan?

Many investors aim for roughly 8–12% on a leveraged rental, but it varies widely within Michigan by market and price point. The Michigan figures above seed a realistic example; replace them with your actual rent and expenses, set the target to the return you require, and let the calculator flag the deal.

Are the Michigan numbers in this calculator accurate?

They are typical statewide figures used only to seed a realistic example — $240,000 home, $1,500/month rent, 1.54% property tax, 1.30% insurance. Real numbers vary by city, insurer, and assessment, so replace them with your own before relying on the result.

Does cash-on-cash include the mortgage?

Yes — that is the point. It subtracts debt service from NOI. The denominator is your own cash (down payment + closing costs), not the purchase price, so leverage is baked in on both sides. For the unlevered view, see the cap rate calculator.

Does this calculator upload my data?

No. All calculations run locally in your browser. The inputs never leave your device — confirm it in your browser’s network tab while editing the fields.