HMO Yield Calculator UK
Turn room rates into deal numbers: gross yield, total monthly cashflow and cashflow per room, with the HMO licence, realistic management costs and jurisdiction-aware stamp duty all counted.
Your numbers
Average across rooms.
Purchase & running costs
HMO management is floored at 15%.
Gas, electricity, water, council tax, broadband and similar operator-paid costs.
Your results
- Monthly cashflow
- £675
- Gross yield
- 15.0%
- Total monthly rent
- £2,750
- Cash-on-cash ROI
- 8.0%
- Cash needed
- £101,150
£135 per room after the costs entered
5 rooms
annual cashflow ÷ cash invested
deposit + refurb + tax + costs
- SDLT (England & N. Ireland)additional-property rates
- £12,900
- Monthly mortgage paymentinterest-only
- £756
- Total investmentincl. refurb and licence
- £266,150
Free to use, no sign-up needed. Figures are estimates for guidance, not financial or tax advice.
How the HMO calculator works
An HMO (house in multiple occupation) is let by the room rather than as one household, which multiplies the rent and the workload at the same time. This calculator uses the same room-by-room engine as Dealist's deal analyser: it builds a rent schedule from your room count and average room rate, then runs the deal like any other rental with HMO-specific costs layered in.
Total monthly rent and gross yield
Total monthly rent = rooms × average rent per room. 5 rooms at £550 is £2,750 a month. Gross yield = annual rent ÷ purchase price × 100. Letting by the room is what can lift an HMO's gross yield above a single let of the same house.
Total investment
Total investment = purchase price + refurbishment or conversion + stamp duty + licence + legal and other costs. Stamp duty uses the real 2026 additional-property tables for whichever nation you pick: SDLT with the 5% surcharge, LBTT with the 8% ADS, or LTT higher rates. The licence fee is a real cost, so it has its own line.
Monthly cashflow, total and per room
Cashflow = total rent − (mortgage interest + management + maintenance + voids + insurance + bills). Management is floored at 15% of rent, so the cashflow does not rest on single-let management costs. Management and maintenance are charged on the full rent, before the void allowance, which slightly overstates them in weeks a room is empty. The void allowance spreads your assumed empty weeks across the year. Bills are the operator-paid utilities, council tax and broadband. Dividing by the number of rooms gives cashflow per room, a way to compare deals of different sizes.
Cash-on-cash ROI
Cash-on-cash ROI = annual cashflow ÷ cash invested × 100, where cash invested is your deposit plus refurbishment, stamp duty, licence and fees. It answers whether the extra work of an HMO actually beats simpler strategies on the money you put in.
Worked example
You buy a large terrace for £220,000 and spend £30,000 converting it to a 5-bed HMO letting at £550 a room with bills included, financed at 75% LTV and 5.5% interest-only.
| Total monthly rent (5 × £550) | £2,750 |
| SDLT (additional-property rates) | £12,900 |
| Licence and legal costs | £3,250 |
| Total investment | £266,150 |
| Cash invested (after £165,000 mortgage) | £101,150 |
| Mortgage interest per month | £756 |
| Management (15%), maintenance, voids, insurance | £868 |
| Bills and utilities | £450 |
| Monthly cashflow | £675 |
The gross yield is 15.0% and the cashflow works out at about £135 per room per month, a cash-on-cash return of 8.0% on the £101,150 invested. Run the same house as a single let at £1,100 a month and the gross yield drops to 6.0%: the HMO premium is real, but so are the costs that this calculator makes you count. Figures are rounded to the nearest pound.
Frequently asked questions
What counts as an HMO?
In England, a house in multiple occupation is a property let to at least three people from more than one household who share facilities such as a kitchen or bathroom. With five or more people from more than one household it is a large HMO, which needs a mandatory licence unless it is a purpose-built flat in a block of three or more self-contained flats. Wales sets a narrower mandatory test: five or more people from two or more households in a property of three or more storeys. Scotland requires a licence once three or more unrelated tenants live in the property.
Do I need an HMO licence?
It depends on the nation. In England, a large HMO (five or more people from more than one household) needs a mandatory licence, except a purpose-built flat in a block of three or more self-contained flats, which a council licensing scheme may still cover. In Wales, mandatory licensing applies only where the HMO has three or more storeys and five or more people from two or more households. In Scotland, a licence is needed once three or more unrelated tenants live there. Councils in England and Wales can also license smaller HMOs through their own schemes, so always check the specific council before buying. Fees are set by each council, which is why this calculator includes the licence as a line item.
What is a good gross yield for an HMO?
There is no official benchmark. HMOs are bought for income, so compare the yield with the same house as a single let in the same area: if the HMO yield is not clearly higher, the extra management, licensing and refurbishment burden is hard to justify.
Why is management set at a minimum of 15%?
Room-by-room lettings mean more tenancies, more turnover, more inspections and bills administration than a single let, whether you pay a managing agent or do it yourself. The calculator floors management at 15% so the cashflow does not rest on single-let management costs.
Are bills included in the calculation?
Yes, if you enter them. When rooms are let with bills included, the calculator has a monthly bills and utilities field for the gas, electricity, water, council tax, broadband and similar costs you pay as the operator. It starts at £450 a month; replace it with the real figures for your property. If your rooms are let without bills, set it to 0.
What is Article 4 and why does it matter for HMOs?
In England, converting a family home to a small HMO (three to six occupiers) is normally permitted development, but councils can make Article 4 directions removing that right in specific areas, meaning you need planning permission. Buying in an Article 4 area without checking can be an expensive mistake.
Do HMOs need a special mortgage?
Check before you assume a standard buy-to-let mortgage will do: each lender sets its own HMO criteria, and an HMO may need a specialist product with its own rates, deposit and landlord-experience requirements.
Sources
The stamp duty in this calculator uses the rates each tax authority publishes, applied to the nation you choose. Everything else, such as rent, mortgage rate and costs, is an assumption you set. The other rules this page describes come from the official pages listed under Other rules on this page. Last reviewed . Rates can change at a Budget, so confirm the current figure with the tax authority or your conveyancer before you commit to a purchase.
England and Northern Ireland (Stamp Duty Land Tax)
- Stamp Duty Land Tax: residential property rates (opens in a new tab) · HMRC, GOV.UK
- Higher rates of Stamp Duty Land Tax (opens in a new tab) · HMRC, GOV.UK
- Rates of Stamp Duty Land Tax for non-UK residents (opens in a new tab) · HMRC, GOV.UK
- Stamp Duty Land Tax: corporate bodies (opens in a new tab) · HMRC, GOV.UK
Scotland (Land and Buildings Transaction Tax)
- LBTT residential property rates and bands (opens in a new tab) · Revenue Scotland
- The Additional Dwelling Supplement (ADS) (opens in a new tab) · Revenue Scotland
Wales (Land Transaction Tax)
- Land Transaction Tax rates and bands (opens in a new tab) · Welsh Revenue Authority, GOV.WALES
- Higher rates of Land Transaction Tax: overview (opens in a new tab) · Welsh Revenue Authority, GOV.WALES
Other rules on this page
- House in multiple occupation licence (opens in a new tab) · GOV.UK
- Licensing of HMOs (Prescribed Description) (England) Order 2018, article 4 (opens in a new tab) · legislation.gov.uk
- Licensing of HMOs (Prescribed Descriptions) (Wales) Order 2006, article 3 (opens in a new tab) · legislation.gov.uk
- HMO licence for landlords in Scotland (opens in a new tab) · Scottish Government, mygov.scot
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