UK HMO Cash-on-Cash Return Calculator
Measure the cash-on-cash return of a UK house in multiple occupation after licensing, utilities, management and mortgage costs.
- HMO Gross Yield
- 8–12%
- Room-by-room
- Licensing
- £500–£1,500
- Per property
- Void Allowance
- 8%
- Room turnover
Formula & Statutory Rule
Formula
cash_on_cash = annual_pre_tax_cash_flow / cash_invested × 100
Statutory Rule
hmo_gross_yield = room_income / price × 100; void_allowance = 8%Regional Benchmark Reference
| Jurisdiction / Tier | Rate or Limit | Statutory Note |
|---|---|---|
| Gross yield | 8–12% | Room-by-room |
| Licensing | £500–£1,500 | Per property |
| Void | 8% | Turnover |
Frequently Asked Questions
What is an HMO?
A house in multiple occupation is a property let to three or more tenants who share facilities.
Do HMOs need a licence?
Larger HMOs require a licence from the local authority, with fees and minimum standards.
Why do HMOs yield more?
Renting room-by-room generates higher gross income than a single let, though costs and voids are higher.
What costs are unique to HMOs?
Utilities, cleaning, licensing and higher management fees are typically borne by the landlord.