Short answer: add up every room's rent, take off the bills you pay, licensing, insurance, maintenance and voids to get net income, then divide by the purchase price for net yield. Finance costs come off last to give cashflow. Gross yield on an HMO looks high; net yield is the number that matters.
Worked example
An illustrative five-bed HMO bought for £230,000. Figures are examples only, not a forecast.
| Line | How it's worked out | Per year |
|---|---|---|
| Rent | 5 rooms × £550 a month × 12 | £33,000 |
| Gross yield | £33,000 ÷ £230,000 | 14.3% |
| Bills (energy, water, broadband, council tax) | £550 a month | −£6,600 |
| HMO licence | £1,000 spread over 5 years | −£200 |
| Insurance | Example quote | −£700 |
| Maintenance | 8% of rent | −£2,640 |
| Voids | 5% of rent | −£1,650 |
| Net income before finance | £21,210 | |
| Net yield | £21,210 ÷ £230,000 | 9.2% |
| Mortgage interest | 75% loan (£172,500) at 5.5% interest-only | −£9,487.50 |
| Cashflow before tax | £11,722.50 (about £977 a month) |
Self-managed. A letting agent, furnishing, a different licence fee or higher voids would change the result. Tax is not included.
The costs people forget
- Bills: most HMOs are let with bills included, and they are often the biggest cost.
- Licensing: mandatory for larger HMOs, and many councils run additional licensing. Fees vary by council. Check yours with the free HMO & Property Licence Checker.
- Voids by room: rooms turn over more often than whole houses, so allow for empty weeks.
- Management: HMO management fees are usually higher than for a single let.
Tools for HMO numbers
| Option | Cost (as published 18 October 2026) | What it does |
|---|---|---|
| Spreadsheet | Free | Anything you build, but easy to miss a cost |
| PropertyData | From £15 a month + VAT | HMO yield hotspots by area and the National HMO Register, plus market data |
| Property Clues HMO Yield Calculator | £29 one-off | Room-by-room rent and costs after bills, voids and licensing, with yield and cashflow for your specific property |
Area data tells you where HMOs tend to yield well; a room-by-room calculator tells you whether a specific house works. Many investors use both.
Questions people ask
How do you calculate HMO yield?
Gross yield is total annual room rent divided by the purchase price. Net yield takes off bills, licensing, insurance, maintenance and voids before dividing. In the worked example, £33,000 rent on a £230,000 house is 14.3% gross and 9.2% net.
What is a good net yield for an HMO?
It depends on area, finance and risk, so there is no single figure. Compare net yield and cashflow after finance rather than gross yield, because HMO running costs are much higher than a single let.
Is there an HMO calculator without a subscription?
Yes. The Property Clues HMO Yield Calculator is a one-off £29 and works room by room, after bills, voids and licensing. A free preview with example figures is available.