Question 1

What is a good HMO yield in the UK?

Accepted Answer

A gross HMO yield of 10–15% is achievable in many UK cities. Because rents are charged per room, HMOs typically yield 30–50% more than the equivalent single-let property. In high-demand student and professional cities — Sheffield, Nottingham, Leeds, Manchester — gross yields of 12–15% are common. Net yield after all costs (management, bills, maintenance, voids) is typically 7–10%.

Question 2

How many rooms do I need for a property to be classed as an HMO?

Accepted Answer

A property occupied by 3 or more unrelated tenants who share facilities (kitchen, bathroom) is classed as an HMO in England. Properties with 5 or more unrelated occupants across 2 or more storeys require a mandatory HMO licence. Smaller HMOs may require an additional licence in selective licensing areas. Use PropertyBrain's free HMO yield calculator to model different room configurations.

Question 3

How do I calculate HMO yield?

Accepted Answer

HMO gross yield = (Total monthly room rents × 12) ÷ Purchase price × 100. For example, 5 rooms at £550/month = £6,600/month × 12 = £79,200/year ÷ £220,000 purchase price = 36% gross — but deduct mortgage, bills, management (typically 15%), maintenance and voids. PropertyBrain's calculator handles all deductions to show your net monthly cashflow.

Question 4

Do I need a licence to run an HMO?

Accepted Answer

Yes. Any HMO with 5 or more unrelated occupants in England requires a mandatory HMO licence from the local council. Additional licensing schemes vary by council — some require licences for 3+ occupant HMOs. Unlicensed HMOs face fines up to £30,000 and rent repayment orders. Always check your local council's licensing requirements before converting a property.

Question 5

What are the main costs of running an HMO?

Accepted Answer

HMO running costs typically include: mortgage (if applicable), HMO management fee (12–15% of gross rents), utility bills (gas, electric, water, broadband — often landlord-paid), council tax, HMO licence fee (£300–£1,500 every 5 years), annual fire safety checks, furniture replacement, and higher void rates between student cycles. PropertyBrain's HMO calculator itemises all costs to give accurate net cashflow.

HMO Yield Calculator UK

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