Cash-on-cash return calculator — Texas

Frequently asked questions

How do you calculate cash-on-cash return?

Cash-on-cash return is annual pre-tax cash flow divided by total upfront cash invested. This includes down payment, closing costs, rehab, and other initial costs.

What is a good cash-on-cash return for rental property?

Targets vary by market and risk profile. Many investors compare cash-on-cash return against financing risk, vacancy assumptions, and alternative uses of capital.

Can I save cash-on-cash calculator results?

This calculator does not save your session. Use a free Veld account to save deal assumptions, compare scenarios, and track portfolio performance over time.

Do Texas property taxes affect cash flow in this calculator?

Yes—and they matter. Texas has no state income tax but property taxes are among the highest in the country. Default inputs start with HUD-based rent estimates; enter your expected annual property tax and insurance load in the expenses field to model real cash flow.

What is a good cap rate in Texas?

Residential investment cap rates in Texas vary by market. DFW and Houston investors typically see 5.5–7% on SFR and small multifamily as of 2024–2025, while Austin and premium suburban markets compress closer to 4.5–5.5%. Texas's high effective property tax (~1.6–2% of value depending on county) meaningfully reduces NOI—enter your actual tax bill rather than using a national default to get an accurate cap rate.

How do I estimate cash-on-cash return in Texas?

Cash-on-cash return in Texas depends heavily on your down payment, financing rate, and how accurately you model property taxes and insurance. With a 20% down payment and 7–8% mortgage rate, many Texas SFR deals run 4–8% CoC. High property taxes reduce NOI, which compresses CoC relative to lower-tax states—use local tax estimates, not a national rule of thumb.

What drives cash-on-cash return most in Texas?

In Texas, cash-on-cash is most sensitive to your entry basis ($339,500 median home prices), interest rate, and true operating costs like 1.25% effective property tax. Stress test rent, vacancy, and maintenance before relying on one output.