We have collated the data from over 140 completed HMO investment surveys by different valuers all across the country. Our aim was to give property investors an idea of what a realistic valuation of their property could be. Here are 2024’s HMO Valuation Calculations!
Generally, to calculate a probable valuation, we calculate number of rooms X the average annual net rent charged per unit X of the net yield. Of course, this is only a rough guide based on the data as valuers will base their figures on the market rent rather than a premier rent based on the quality of the property’s furnishings etc.
For example: If someone is receiving a rent of £100 per week for 6 rooms outside of London, this gives an annual gross rent of £31,200 and an annual net rent of £26,064.48. To calculate the probable valuation, divide this by the net yield average of 8.28% and multiply it by 100, which gives a value of £314,788 for the property.
Broken down, the calculation is as follows:
• 6 rooms X £100 weekly gross rent X 52 weeks = £31,200 annual gross rent
• £31,200 annual gross rent – 16.46% management fees = £26,064.48 annual net rent
• £26,064.48 annual net rent divided by 8.28% net yield average X 100 = HMO valuation of £314,788
All of the 141 reports come from properties located outside of London.
Below are averages we calculated from the surveys analysed.
|
Non-London averages (140 + properties) |
|
|
Value per unit |
£500,390 |
|
Gross yield |
9.92% |
|
Net yield |
8.28% |
|
% of management fees deducted |
16.46% |
|
Annual gross rent charged per unit |
£49,640 |
|
Annual net rent charged per unit |
£41,479 |
|
Weekly gross rent per room |
£159 |
|
Weekly net rent per room |
£132 |
Please be aware these figures are based on national averages so area figures could be higher or lower – this is for information only and due diligence should always be undertaken before proceeding.
Feel free to download this information in a printable form: 2024’s HMO Valuation Calculations.