Cash-on-cash return is the annual pre-tax cash flow from a property divided by the total cash you put in. For Singapore leveraged residential, it captures the effect of leverage on yield: high-LTV investments boost cash-on-cash even when gross yield is modest.
Cash-on-cash return measures the annual cash return on the actual cash you invested — separate from the property's gross yield, separate from appreciation. It's the metric that answers "for every dollar I put into this property out of pocket, how many cents come back to me each year?"
The metric is most useful for leveraged purchases — at 75% LTV financing, you're investing roughly 25% of the property price as your "cash in", and the cash-on-cash calculation isolates the return on that quarter-price stake.
Singapore's MAS LTV cap of 75% on the first private property loan (since July 2018) and 75% on HDB loans (since August 2024) sets the typical "cash in" floor at about 25% of price (as of 2026-05). The remaining cash equation includes BSD, legal fees, and any furnishings — pushing total cash-out to roughly 28–32% of price for most purchases. Cash-on-cash is computed against this full cash-out figure.
What Does It Mean?
Cash-on-Cash Return is the annual pre-tax cash flow divided by the total cash invested (primarily your down payment and acquisition costs). It measures the return on your actual cash outlay rather than the total property value.
How Is It Calculated?
Cash invested includes down payment, stamp duties, legal fees, and renovation costs.
Worked Example
Why It Matters
Cash-on-cash return focuses on what matters most to leveraged investors: the return on actual money put in. A property with modest gross yield but high leverage can deliver excellent cash-on-cash returns.
Where to Find This on ShiokNest
- Buy-to-Rent ROI Calculator
- End-to-End Investment Calculator
Look for the tooltip icon next to this metric on ShiokNest for a quick reminder of its definition.
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This glossary article is auto-generated from ShiokNest's financial data and updated periodically. Rates and figures are current as of May 2026. Check official sources for the latest.
Formula: Cash-on-Cash = Annual Pre-Tax Cash Flow ÷ Total Cash Invested.
Worked example: S$1.5M condo, 25% down (S$375k), S$1.125M loan at 4% over 25 years, S$4,500/month rent.
- Cash invested: S$375,000 (down payment) + S$44,600 (BSD) + S$5,000 (legal) + S$15,000 (furnishings) = S$439,600
- Annual gross rent: S$54,000
- Less operating expenses (S$11,400 per the DSCR example): S$42,600 NOI
- Less annual mortgage instalment: S$71,344 (4%, 25 years on S$1.125M)
- Pre-tax cash flow: S$42,600 − S$71,344 = −S$28,744 (negative)
- Cash-on-Cash: −S$28,744 / S$439,600 = −6.5%
Negative cash-on-cash is standard for Singapore residential at current rates — meaning the landlord subsidises ~6.5% of the cash-invested amount each year, betting on appreciation to compensate. To hit zero cash-on-cash, monthly rent would need to rise to ~S$6,900 (a 53% increase) or the down-payment-funded cash-in would need to shrink dramatically.
- Always include all cash-out in the denominator — down payment, BSD, legal, furnishings, any initial repairs. Leaving out BSD inflates cash-on-cash artificially.
- Compute on annual instalment, not interest-only — even though principal repayment is "equity building", it\'s still cash leaving your pocket each month.
- Re-compute under stress scenarios — vacancy of 2 months, rate hike of 1 percentage point, etc. The downside reveals the real risk.
- Compare against bond yields — if cash-on-cash plus expected appreciation doesn\'t beat a 4% bond yield, the property is underperforming on a risk-adjusted basis.
Frequently Asked Questions
How is cash-on-cash different from IRR?
Cash-on-cash is annualised, single-year; doesn't account for time value, appreciation, or exit. IRR captures all cash flows over the full hold including the exit sale.
Why is Singapore residential cash-on-cash often negative?
Rates have risen since 2022, but rents haven't kept pace — the spread between mortgage rates (~4%) and rental yield (~3.5%) leaves landlords subsidising holds. Appreciation must compensate.
How can I improve cash-on-cash?
Three levers: (1) buy at a higher net yield (lower-priced or higher-rent areas), (2) reduce financing costs (more cash down, lower-rate mortgage), (3) reduce operating expenses (negotiate MCST, manage repairs efficiently).
Does cash-on-cash include tax?
The standard definition is pre-tax. Post-tax cash-on-cash is more conservative — typically lower by 0.5–1.5 percentage points depending on tax bracket.
What's a good cash-on-cash for Singapore property?
Positive cash-on-cash (i.e., property pays for itself plus some cash to landlord) is rare in current residential. Achievable in some commercial property and in pockets of older HDB rental.