A house in multiple occupation (HMO) is let room by room, so the rent is usually higher than a single let, but so are the costs: bills, furnishing, management, licensing and more turnover of tenants.
This calculator lets you enter the rent for each room, then takes off bills, empty months, management, the licence fee and running costs to show gross and net yield and monthly cashflow for the whole house.
| Purchase price | £300,000 |
|---|---|
| Rooms | 5 rooms at £550 a month |
| Rent | £2,750 a month, £33,000 a year |
| Gross yield | £33,000 ÷ £300,000 = 11% |
| Bills paid by the landlord | £400 a month |
| Rent after bills | £2,350 a month, before mortgage, management and voids |
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HMOs often show higher gross yields than single lets, but the costs are higher too. Net yield and monthly cashflow after bills, voids and management give a fairer comparison with a normal buy to let.
In England a mandatory HMO licence is needed when 5 or more people forming 2 or more households share facilities. Councils can also license smaller HMOs, so check the council for the exact address.
Usually the landlord, with the cost built into the room rents. That is why the calculator takes the bills off before showing the yield and cashflow.
It depends on the area and the type of tenant. Many landlords allow 2 to 4 weeks a year per room. The calculator lets you set your own figure.
Education, not advice. Rules change and depend on your circumstances. Check GOV.UK and speak to a qualified adviser before you act.