When assessing potential HMOs, how do I calculate the rental yield considering room-by-room income and what specific costs (e.g., increased utility bills, HMO licence) should be included to get a true picture?
Quick Answer
To calculate HMO rental yield, sum all individual room rents, then subtract ALL operating costs (utilities, council tax, insurance, repairs, management, licensing, voids) from this gross income, before dividing by the property's purchase price plus acquisition costs.
About This Topic
Learn how to accurately calculate HMO rental yield by accounting for room-by-room income and all operating costs like utilities, council tax, and licensing.
This question is part of our Buying Your First Property category, providing expert guidance on UK property investment.
Expert Guidance from Steven Potter
Steven Potter is a UK property investment coach with a £1.5M portfolio and over 5 years of hands-on experience. He has helped over 1,000 students achieve their property investment goals through practical, ethical strategies.
Ready to Take Action?
Get personalised property investment coaching with Steven Potter's Property Freedom Framework.
Learn about the Property Freedom Framework