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PROPERTY WORKSPACE / LETLOGIQ

HMO profit calculator: room rents, costs and ROI

Model an HMO room by room, including the extra bills and operating costs. HMO mode is selected below so you can estimate rental profit and cash-on-cash ROI.

2026–27 tax basis
Start calculation ↓Read the guide ↓

Your investment

Illustrative starting inputs

Start here: enter your details
4 stages below. Scroll the fields, then choose Next.

The property basics

Start with the purchase price and a realistic rent.

Use legally permitted rooms, not the number of occupants.
£
£
Use Apply to all rooms below, then adjust each room individually.
Count residential property worldwide, including applicable spouse / joint-owner interests. Companies use higher rates.

Rent for each room

£
£
£
£
£

Total scheduled rent: £3,250 / month

HMO rent = the sum of your 5 individual room rents, before room vacancies. Shared-house HMO only; separate self-contained flats and commercial accommodation need a different tax review.

Check the HMO essentials

In England, mandatory licensing generally covers 5 or more people from 2 or more households sharing facilities. Smaller HMOs may need additional local licensing. Check planning use, Article 4 restrictions, room sizes and fire-safety requirements with the council.

Official guidance for England ↗
Your confirmation is not a legal eligibility assessment.
Tab 1 of 4
Values update your estimate as you type.
Monthly post-tax cash profitLetLogi
£1,054/ month

£12,648 a year after running costs, mortgage payments and estimated tax.

Pre-tax cash / month£1,541
Income tax / month£487
Post-tax cash / month£1,054

Both cash figures are after running costs and mortgage interest only. No capital repayment is deducted. The post-tax figure also deducts estimated tax. Displayed amounts are rounded independently.

FULL-YEAR OPERATING ESTIMATEAfter income tax
Cash-on-cash ROI
14.49%Annual post-tax cash ÷ upfront cash
Upfront cash needed£87,295Includes setup costs & cash reserve
Gross yield · pre-tax19.50%Full rent ÷ purchase price
Net yield · pre-tax, pre-finance13.00%After voids & costs; before finance / tax
LetLogi
YOUR INVESTMENT, REFINED

A stronger financial footing

Change an input. See what improves — and what gives.

79.5OUT OF 100
Rules-based summary

Yield: Your 19.50% gross yield is 10.72 percentage points above the 8.78% HMO lender-sample average. Your net yield is 13.00% before finance and tax.

Your money at work: For every £1,000 of upfront cash invested, this property generates approximately £212 a year before tax, after running costs and mortgage payments.

Cash payback: 6 years 11 months under the projection below.

Paragon Bank · Q1 2026 gross yields. Lender sample, not a local market valuation. Standard BTL uses the overall sample, including specialist properties; HMO uses the HMO sample. Gross yield is before costs, finance and tax. Benchmark checked 11 September 2026; not live data.

This scenario leaves £1,054 a month after tax and mortgage payments. Under your combined custom stress, post-tax monthly cash is £674. Confirm 23 cost allowances before relying on the score.

Expand score breakdown & comparisonsCollapse score breakdown & comparisons
Compared with your saved point (HMO · personal)+0.0 points
Post-tax cash £0 / month changeUpfront cash £0 change
Net operating yield25.0 / 25+0.0
x
0% → 0 points; 8% or more → 25.
Post-tax cash return25.0 / 25+0.0
x
0% ROI → 0 points; 10% or more → 25.
Combined stress resilience25.0 / 25+0.0
x
Fixed rent −10% / rate +2pp: no surplus → 0; surplus ≥20% of base rent collected → 25.
Borrowing headroom4.5 / 15+0.0
x
90% loan-to-value → 0; 40% or less → 15.
Allowance confirmation0.0 / 10+0.0
x
Share of optional cost fields explicitly entered × 10.
Try a what-if

Temporary assumptions to explore, not suggested rents or offers.

0% of cost allowances entered23 still use planning estimates

HMO licence, planning and permitted occupancy still need verification. The score assesses finances, not permission to operate.

How this assessment works

Points update in 0.1-point increments. Financial factors use the same thresholds for both strategies. Scoring always tests rent −10% and interest +2 percentage points (cash purchases have no rate shock), regardless of the custom stress settings below.

Saved comparison inputs last for this page session. Entering an allowance confirms only that you supplied it, not that it is accurate. Location, tenant demand, property condition and legal eligibility are not scored. This is a planning rubric, not a guarantee.

RECOUP YOUR UPFRONT CASH
LetLogi

Post-tax cash payback

%
Applied from year 2. Enter 0 for unchanged rents; range −20% to 20%.
%
Fixed running costs grow from year 2. Management fees follow collected rent; range −20% to 20%.
6 years 11 months

To recover £87,295 of upfront cash, including your opening reserve, from cumulative rental cash after tax.

By the recovery month: £87,482 cumulative post-tax cash — £87,295 repays your upfront investment and £187 is surplus. Monthly cash is averaged within each year.

First full year after recovery · year 8

Scheduled rent / month£3,250
Rent collected / month, after voids£3,000
Post-tax cash profit / month£1,054
Post-tax cash profit / year£12,648
Expand annual projection · 50 years
YearRent collectedRunning costsMortgage paymentsTaxPost-tax cashCumulative cashSurplus after upfront
1£36,000£10,010£7,500£5,842£12,648£12,648-£74,647
2£36,000£10,010£7,500£5,842£12,648£25,296-£61,999
3£36,000£10,010£7,500£5,842£12,648£37,944-£49,351
4£36,000£10,010£7,500£5,842£12,648£50,592-£36,703
5£36,000£10,010£7,500£5,842£12,648£63,240-£24,055
6£36,000£10,010£7,500£5,842£12,648£75,888-£11,407
7£36,000£10,010£7,500£5,842£12,648£88,536£1,241
8£36,000£10,010£7,500£5,842£12,648£101,184£13,889
9£36,000£10,010£7,500£5,842£12,648£113,832£26,537
10£36,000£10,010£7,500£5,842£12,648£126,480£39,185
11£36,000£10,010£7,500£5,842£12,648£139,128£51,833
12£36,000£10,010£7,500£5,842£12,648£151,776£64,481
13£36,000£10,010£7,500£5,842£12,648£164,424£77,129
14£36,000£10,010£7,500£5,842£12,648£177,072£89,777
15£36,000£10,010£7,500£5,842£12,648£189,720£102,425
16£36,000£10,010£7,500£5,842£12,648£202,368£115,073
17£36,000£10,010£7,500£5,842£12,648£215,016£127,721
18£36,000£10,010£7,500£5,842£12,648£227,664£140,369
19£36,000£10,010£7,500£5,842£12,648£240,312£153,017
20£36,000£10,010£7,500£5,842£12,648£252,960£165,665
21£36,000£10,010£7,500£5,842£12,648£265,608£178,313
22£36,000£10,010£7,500£5,842£12,648£278,256£190,961
23£36,000£10,010£7,500£5,842£12,648£290,904£203,609
24£36,000£10,010£7,500£5,842£12,648£303,552£216,257
25£36,000£10,010£7,500£5,842£12,648£316,200£228,905
26£36,000£10,010£7,500£5,842£12,648£328,848£241,553
27£36,000£10,010£7,500£5,842£12,648£341,496£254,201
28£36,000£10,010£7,500£5,842£12,648£354,144£266,849
29£36,000£10,010£7,500£5,842£12,648£366,792£279,497
30£36,000£10,010£7,500£5,842£12,648£379,440£292,145
31£36,000£10,010£7,500£5,842£12,648£392,088£304,793
32£36,000£10,010£7,500£5,842£12,648£404,736£317,441
33£36,000£10,010£7,500£5,842£12,648£417,384£330,089
34£36,000£10,010£7,500£5,842£12,648£430,032£342,737
35£36,000£10,010£7,500£5,842£12,648£442,680£355,385
36£36,000£10,010£7,500£5,842£12,648£455,328£368,033
37£36,000£10,010£7,500£5,842£12,648£467,976£380,681
38£36,000£10,010£7,500£5,842£12,648£480,624£393,329
39£36,000£10,010£7,500£5,842£12,648£493,272£405,977
40£36,000£10,010£7,500£5,842£12,648£505,920£418,625
41£36,000£10,010£7,500£5,842£12,648£518,568£431,273
42£36,000£10,010£7,500£5,842£12,648£531,216£443,921
43£36,000£10,010£7,500£5,842£12,648£543,864£456,569
44£36,000£10,010£7,500£5,842£12,648£556,512£469,217
45£36,000£10,010£7,500£5,842£12,648£569,160£481,865
46£36,000£10,010£7,500£5,842£12,648£581,808£494,513
47£36,000£10,010£7,500£5,842£12,648£594,456£507,161
48£36,000£10,010£7,500£5,842£12,648£607,104£519,809
49£36,000£10,010£7,500£5,842£12,648£619,752£532,457
50£36,000£10,010£7,500£5,842£12,648£632,400£545,105

Illustration, not a forecast: rents and fixed costs change once each year; vacancy rates stay constant. Tax is recalculated using fixed 2026–27 rules and unchanged other income, without carrying tax losses or finance relief forward. Repayment mortgages amortise and end at the entered term. Interest-only borrowing is assumed refinanced at the same rate with no fees, leaving the capital debt outstanding. No sale, capital growth or reinvestment is included. Rent increases must be achievable and legally permitted.

LetLogi

Follow the money

Full-year operating cash breakdown. Amounts are rounded independently.

Scheduled rent£39,000
Less empty periods-£3,000
Rent collected£36,000
Running costs＋ Show cost breakdown− Hide cost breakdown-£10,010
Maintenance & repairs-£1,500
Landlord insurance-£650
Service charge & ground rent-£0
Safety checks & compliance-£300
Accounts & administration-£300
Other allowable running costs-£0
Non-deductible cash costs-£0
Energy & water-£3,600
Council tax / domestic rates-£1,800
Broadband-£360
Cleaning & gardening-£1,200
Licensing-£300
Management fees-£0

Includes all running-cost categories; figures are rounded independently.

Mortgage interest-£7,500
Capital repaid-£0
Pre-tax cash profit£18,490
Estimated income / corporation tax-£5,842
Post-tax cash profit£12,648
Upfront cash & annual tax detail
Deposit / cash purchase£50,000
Purchase tax£11,500
Refurbishment & other setup£20,300
Mortgage & broker fees£2,495
Opening reserve£3,000
Taxable property profit (not cash profit)£25,990
HMO bills & licensing within running costs£7,260
Personal finance-cost tax reduction£1,500
Unused finance costs to carry forward£0
Property loss (no current tax credit)£0

Repayment principal builds equity but reduces spendable cash. ROI excludes that equity gain and any property appreciation. Purchase costs are not deducted from ongoing rent. Company losses are not set against other profits in this estimate.

Give it a stress test

Monthly post-tax cash

What happens when the assumptions move against you?

%
Reduces total rent collected after your normal vacancy allowance. For an HMO, this covers all rooms together; fixed bills stay unchanged.
pp
Lower rentTotal property rent collected down 10% after the usual vacancy allowance
£874
Higher interestRate up 2 percentage points
£854
Both togetherReduced rent and increased rate
£674

Each scenario recalculates tax and the first 12 loan payments. A rate increase has no effect on a cash purchase. These are scenarios, not forecasts or lender affordability tests.

Published by LetLogiQ · Page updated 20 September 2026 · Calculation basis & updates

Build the income from individual rooms

Enter only rooms that can legally be let, then set an achievable rent for each room. The quick-fill control is a starting point; different room sizes and facilities can justify different rents. Occupancy permission is a separate check from financial viability.

Include the costs that headline HMO yields miss

Allow for energy, water, council tax or domestic rates, broadband, cleaning, maintenance, furnishings and licence costs where they apply to your property. Bills and licence requirements vary by location and tenancy arrangements. Check local permissions and replace the calculator allowances with actual quotations.

Understand HMO ROI

The cash-on-cash return divides annual cash by your upfront cash, including deposit or purchase funds, purchase tax, refurbishment, HMO setup, furniture and reserve. The calculator separately shows gross yield, which does not deduct operating costs, mortgage payments or tax.

HMO worked example

This fixed illustration uses the calculator’s starting assumptions, not your edited inputs: England, a £200,000 additional property, £50,000 deposit, 5% interest-only borrowing and a 25-year term. Five rooms at £650 per month each, four weeks’ voids and HMO operating allowances. Personal ownership, £35,000 other annual income and the England/Wales/Northern Ireland income-tax basis. Remaining costs use the editable planning estimates.

Annual scheduled rent
£39,000
Annual running costs
£10,010
Annual estimated tax
£5,842
Monthly cash after tax
£1,054

Post-tax cash-on-cash ROI is 14.49%, using upfront cash of £87,295.

Rounded figures are illustrative. The live calculator above provides the full cost and tax breakdown.

Common questions

Can each HMO room have a different rent?

Yes. Start with a quick-fill room rent, then adjust each room individually. The calculator totals those rents and applies your vacancy assumptions.

Does a profitable result mean I can operate an HMO?

No. Check the relevant council’s licensing, planning, permitted occupancy and safety requirements. A financial score does not establish legal eligibility.

Is HMO ROI the same as rental yield?

No. Yield uses the property price as its denominator. Cash-on-cash ROI uses all upfront cash and can reflect finance and estimated tax. Compare like-for-like definitions.

Explore the other calculators

BTL profit after tax Estimate UK buy-to-let cash flow after running costs, mortgage payments and tax. Compare rental yield, upfront cash and cash-on-cash ROI.Section 24 Estimate rental cash after income tax and residential finance-cost relief. See why taxable property profit can differ from spendable buy-to-let cash.Limited company vs personal Estimate company buy-to-let cash after corporation tax and compare personal ownership on matching inputs. Company figures exclude personal extraction tax.Cash-flow stress test Stress-test buy-to-let cash flow against lower rents and higher mortgage rates, with estimated tax recalculated. A planning tool, not lender approval.
ASSUMPTIONS & SOURCES

How the calculations work

Enter your property, finance, running costs and tax details in the four stages. Choose a single-household letting or an HMO with separate rents for each room, then compare cash purchases, interest-only borrowing and repayment mortgages.

Rental yield: gross yield is scheduled annual rent divided by purchase price. Net yield deducts empty periods and running costs before dividing by purchase price; both are before finance and tax.

Cash profit and ROI: pre-tax cash deducts running costs and mortgage payments from collected rent. Post-tax cash also deducts estimated income or corporation tax. Cash-on-cash ROI divides annual cash profit by all upfront cash, including purchase costs and your opening reserve. Choose Pre-Tax or Post-Tax in the ROI box; the assessment translates pre-tax cash ROI into annual pounds per £1,000 invested, while the score uses post-tax ROI. Capital repayments and property price growth are not cash profit; company figures are before personal extraction tax.

Cash recovery: payback is when cumulative post-tax rental cash covers the upfront investment. Optional rent and cost growth start in year two. The projection holds tax rules and other income constant, and excludes a property sale or capital appreciation. The stress tests explore lower rents and, where relevant, higher mortgage rates; they are not lender affordability decisions.

Tax rules checked 9 September 2026; HMO guidance checked 10 September 2026. Operating figures use 2026–27 tax rules for a full 12 months, not a forecast of future tax years. No automated market data or AI provider is connected.

All non-tax example figures are editable planning estimates as at this date. Your price, rent and financing are illustrative until replaced. Net yield uses purchase price as its denominator and deducts all annual cash running costs. Assessment weights are design choices, not industry benchmarks.

England · HMO licensingWales · HMO licensingScotland · HMO licensingNorthern Ireland · HMO licensingHMRC · SDLT ratesWelsh Revenue Authority · LTT bandsRevenue Scotland · LBTT bandsRevenue Scotland · 8% ADSHMRC · 2026–27 income-tax bandsHMRC · Landlord finance-cost reliefHMRC · Allowable rental costsHMRC · Corporation-tax ratesHMRC · Corporation-tax marginal reliefHMRC · Company purchase-tax relief