How do you work out HMO yield?

Add up the rent from every room to get the total monthly income, multiply by 12 for the annual rent, then divide by the purchase price for the gross yield. Net yield and ROI also subtract bills, voids, management and mortgage interest — which the calculator above does for you.

Why is HMO cashflow higher than a standard BTL?

Letting by the room usually produces more total rent than a single household tenancy, so a well-run HMO can cashflow far better. It also costs more to run — bills are typically included, management is heavier, and licensing, fire safety and Article 4 planning can apply — so model the real costs, not just the headline rent.

Do I need an HMO licence?

Most HMOs of five or more people forming two or more households need a mandatory licence, and many councils run additional or selective licensing on smaller HMOs. Always check the specific council before you buy — it affects both cost and whether the strategy is viable.

How do you work out HMO yield?

Add up the rent from every room to get the total monthly income, multiply by 12 for the annual rent, then divide by the purchase price for the gross yield. Net yield and ROI also subtract bills, voids, management and mortgage interest — which the calculator above does for you.

Why is HMO cashflow higher than a standard BTL?

Letting by the room usually produces more total rent than a single household tenancy, so a well-run HMO can cashflow far better. It also costs more to run — bills are typically included, management is heavier, and licensing, fire safety and Article 4 planning can apply — so model the real costs, not just the headline rent.

Do I need an HMO licence?

Most HMOs of five or more people forming two or more households need a mandatory licence, and many councils run additional or selective licensing on smaller HMOs. Always check the specific council before you buy — it affects both cost and whether the strategy is viable.

HMO Calculator

Work out the real return on a house in multiple occupation — total room income against bills, voids, management and finance — with monthly cashflow, ROI, gross yield and a DealIQ verdict on whether the deal stacks up.

Strategy

Market value

Purchase price

Monthly rent (total)

Sourcing fee

Refurb / furniture

Bills (pcm)

Legal fees

Deposit %

LTV %

Rate %

Management %

Voids/maint. %

Additional property (5% SDLT surcharge)Tax region

Stress test

If things move against you

The same cashflow maths, re-run at a higher rate, lower rent and a void month — pure arithmetic, no forecast.

Scenario	Cashflow / mo	ROI
Today	£996	31.0%
Rate +1%	£933	29.1%
Rent −5%	£908	28.3%
1-month void	£850	26.5%

Self-managed cashflow on the figures you entered. Other running costs are held fixed in each scenario, so these are conservative — a guide, not a forecast.

Full breakdown

BMV

20.0%

Gross yield

21.1%

ROI (self)

31.0%

ROI (managed)

24.5%

Cashflow (self, pcm)

£996

All-in capital

£38,500

SDLT

£5,000

Reverse calc — target ROI 20%

Max offer for 20% ROI: £141,000

SDLT includes the 5% additional-property surcharge. Individual BTL landlords: mortgage interest relief is restricted (Section 24) — check your own tax position. Informational only — not financial advice.

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This calculator is for guidance only and does not constitute financial, tax, mortgage or investment advice. Figures are estimates — always seek professional advice and verify costs before committing to a purchase.

HMO investing — common questions

How do you work out HMO yield?: Add up the rent from every room to get the total monthly income, multiply by 12 for the annual rent, then divide by the purchase price for the gross yield. Net yield and ROI also subtract bills, voids, management and mortgage interest — which the calculator above does for you.
Why is HMO cashflow higher than a standard BTL?: Letting by the room usually produces more total rent than a single household tenancy, so a well-run HMO can cashflow far better. It also costs more to run — bills are typically included, management is heavier, and licensing, fire safety and Article 4 planning can apply — so model the real costs, not just the headline rent.
Do I need an HMO licence?: Most HMOs of five or more people forming two or more households need a mandatory licence, and many councils run additional or selective licensing on smaller HMOs. Always check the specific council before you buy — it affects both cost and whether the strategy is viable.

HMO Calculator

If things move against you

HMO investing — common questions

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