More monthly dollars do not necessarily mean a higher return on each dollar invested.
A deliberately rent-rich sensitivity example
This example uses the original hypothetical $400,000 property with rent changed to $4,800/month. The higher rent is a teaching input, not evidence that a property at this price can achieve it. All expense and financing assumptions remain visible in the public calculator.
Hold a 6.5% assumed 30-year fixed rate for financed cases to isolate leverage. Real lender pricing can differ by down payment. There is no debt in the cash case. Include 3% closing costs, $5,000 make-ready and six months of fixed owner costs plus debt payments as starting liquidity.
Compare monthly income with the cash committed
The table uses annual before-tax cash flow after the capital reserve. The denominator includes down payment, closing costs, make-ready and starting liquidity. These conventions must be the same across rows.
| Down | Monthly cash flow | Starting cash | Annual cash-on-cash |
|---|---|---|---|
| 20% | $842.58 | $113,335.71 | 8.92% |
| 50% | $1,601.06 | $228,784.82 | 8.40% |
| 75% | $2,233.13 | $324,992.41 | 8.25% |
| 100% | $2,865.20 | $421,200.00 | 8.16% |
Why the monthly result and percentage diverge
The larger down payment lowers the mortgage payment and improves the monthly cushion. But the added capital is large relative to the added annual surplus. Cash flow rises while cash-on-cash falls in this selected example.
This relationship is not universal. In the original $3,200-rent example, the same calculation shows a different return pattern. Toggle rent in the calculator to see how the property’s operating economics interact with financing rather than treating one percentage as optimal.
The percentage leaves out important tradeoffs
Cash-on-cash does not include appreciation, loan principal paydown, sale costs or taxes. Lower leverage can still be valuable if it makes difficult months easier to fund. Conversely, money committed to the down payment is less accessible for repairs or another purchase.
Do not choose a larger loan solely because this table has a higher percentage. Verify actual financing, operating expenses and achievable rent, then compare downside cash needs and alternative uses of capital. No financing availability or optimal percentage is established here.
Use actual quotes before making a financing choice
Load the example and compare your intended percentages. Replace the rate separately for each lender quote rather than assuming identical pricing. Keep sufficient cash outside the purchase for costs the model cannot forecast.
The public calculator supports only at least 20% down with a fully amortizing 30-year fixed loan, or cash. Mortgage insurance and other loan products require a different analysis. The signed-in workspace adds deeper scenario comparisons; it still cannot qualify a borrower.
Should I always choose the row with the highest cash-on-cash?
No. Consider verified loan terms, the monthly cushion, liquidity, downside funding and what the metric excludes. This is an illustration, not a financing recommendation.
Sources & review notes
The workflow and hypothetical examples are original RentQuarry educational material. These primary references support the relevant financing or tax distinctions; they do not validate a listing, rent or expense allowance.
- CFPB: Understanding a Loan Estimate
Principal and interest, escrow, closing costs and loan terms. Confirm which disclosures apply to your financing.
Sources checked November 11, 2026. Worked financing examples are checked against deterministic code and independent arithmetic. This is an editorial and arithmetic review, not an independent professional review. Read our method. Corrections: contact RentQuarry.
What do your numbers say?
Try a hypothetical example without an account. Replace the assumptions with researched inputs and review the limitations before relying on a result.
Try this worked example