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The HMO Mortgage Broker

Valuations

HMO Valuation Calculator

Estimate the commercial value of your HMO from rental income, operating costs and market yield.

Related reading: how HMO valuations work.

Use this HMO valuation calculator to sketch an indicative commercial value from rent, running costs and yield. It is a model, not a RICS report. For the methods, down-valuations and typical costs, read how HMO valuations work.

Your figures

Estimate the value of your HMO using the yield method with realistic cost deductions.

Monthly

Gross rent £3,000 a month

Share of gross rent. Includes utilities, management, maintenance, insurance, etc.

Lower in high-value areas, higher in more affordable ones

Typical city yields

Your results

Estimated HMO value
£360,000
Net rent £27,000 a year ÷ 7.5% yield
Annual gross rent
£36,000
Running costs (25%)
-£9,000
Annual net rent
£27,000
Monthly net income
£2,250
This valuation uses net yield after 25% cost deductions. Lower yields typically indicate higher-value areas, while higher yields suggest more affordable locations with potentially higher returns.

Illustrative figures only, based on the numbers you enter. Not a mortgage offer.

How we calculate HMO Valuations

Methodology and data sources, updated March 2026

Formulas

Gross Rental Value
Monthly Rent × 12

Annual rental income calculation

Net Rental Value
Gross Rent - (Management + Maintenance + Insurance)

Net rental income after expenses

Data sources

  • Yes:RICS valuation standards (March 2026)
  • Yes:Local rental market data
  • Yes:HMO valuation criteria
  • Yes:Property condition assessments

Key assumptions

Management FeeStandard HMO management fee
10% of rent
Maintenance ReserveAnnual maintenance budget
£1,500/year
Insurance CostHMO insurance premium
£800/year

Further reading

HMO valuation calculator costs and fees

The instruction fee is set by the lender’s panel, not by this tool. A physical HMO valuation costs more than an AVM on a standard house. AVMs are not for HMO stock that needs works — Precise says so on its bridging criteria. This calculator is free and is not a substitute for that fee. Running costs you deduct here (bills, management, voids) change the net rent and therefore the sketched value.

How the calculation works

Indicative commercial value = net annual rent ÷ market yield. Net annual rent is gross room rent minus the operating costs you enter. A yield of 8% on £40,000 net is £500,000. The yield is an input, not a published lender cap rate. Methodology is in the card above. For when a lender will even take an income basis, use the HMO valuation guide — this page stays a tool.

Returns, rent and yield

Raising rent raises the sketched value; raising the yield lowers it. Do not type a brochure rent the valuer will not accept. Cross-check with the HMO yield calculator so the same house is not using two different rent rolls.

Worked example

Eight rooms at £150 a week is £62,400 gross if fully let. Costs of 28% leave about £44,900 net. At a 7.5% yield the sketch is about £599,000. At 9% it is about £499,000. That spread is why this is not a RICS figure. A down-valuation usually comes from rooms the surveyor strips, not from you picking 7.5% instead of 9%.

What the result means for your mortgage

Lenders lend a percentage of their valuation, not of this sketch. A higher income figure only helps if the named lender will instruct that basis. Pair this with the HMO mortgage calculator after you have a valuation method, not before.

FAQs

HMO valuation calculator questions.

How to value a hmo property?

A surveyor uses bricks-and-mortar comparables, an income (commercial) capitalisation, or both. This calculator only sketches the income method: net rent ÷ yield. For the explainer see how HMO valuations work.

How to value a commercial property calculator?

Commercial property tools capitalise net income. An HMO income valuation is the same idea on room rents. It is not a shop or office calculator and it is not a RICS report.

How much is my hmo worth?

Worth is what a valuer appointed by the lender will sign. This tool gives an indicative income figure from the rents and yield you enter. It is not a formal valuation.

What Counts as a Good HMO Yield?

There is no single good yield on this page. A lower yield on the same net rent produces a higher capital value. The valuer sets the yield from local evidence, not from a target you type.

Next step: quote / speak to a specialist

Tell us the rent roll and whether you need bricks-and-mortar or income. We will not treat this calculator as a valuation. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Important: Rates shown are indicative and subject to status. Your home may be repossessed if you do not keep up repayments on your mortgage. Terms and conditions apply. For current rates and full details, please .

Important: Rates shown are indicative and subject to status. Your home may be repossessed if you do not keep up repayments on your mortgage. Terms and conditions apply. For current rates and full details, please .