Property · Calculator companion · By K Imports
Rental debt cover and cash-on-cash: practical guide
This guide explains how to use the Count.ie rental debt cover and cash-on-cash. Assess pre-tax rental cash return and mortgage coverage. Follow the inputs, method and worked example below, then compare your own scenario.
Guide written .
Open the Rental debt cover and cash-on-cash calculatorWhat to prepare
- Collect the purchase, loan, rental or project figures from dated documents.
- Distinguish purchase price, borrowing, one-off acquisition costs and recurring ownership costs.
- Check the property's use, tax year and any scheme eligibility against official guidance.
Understand the inputs
The calculation method
Net operating income divided by debt service; remaining cash divided by cash invested.
Worked example
Illustrative inputs and their result.
Example inputs
- Full annual rent (€)
- 24000
- Uncollected rent / vacancy (%)
- 5
- Annual non-debt operating costs (€)
- 4500
- Annual capital + interest payments (€)
- 13000
- Total cash invested (€)
- 90000
- Capital within annual debt service (€)
- 7000
Calculated example result
- Debt Service Coverage Ratio
- 1.4077×
- Cash On Cash Return Percent
- 5.8889%
How to interpret the result
A loan payment, gross yield or purchase budget describes only part of ownership. Read exclusions carefully: affordability, lender approval, vacancy, repairs and transaction eligibility may not be fully modelled.
Compare like-for-like properties or financing scenarios, with the same term and cost basis. Where relevant, test a higher interest rate, a vacancy period or a larger maintenance allowance.
Common mistakes to avoid
- Do not compare gross rental yield with net cash flow as if they were the same measure.
- Do not assume a favourable tax result means the property or letting qualifies for a scheme.
- Keep refundable deposits and recurring costs separate from permanent acquisition costs.
Assumptions and sources
Debt service includes capital and interest; operating costs exclude both. Equity gain from capital repayment is not cash income.
If your case falls outside this scope, use a more suitable calculator or contact us about an unclear method.