'HMOs Are Too Complicated and Not Worth It' — Why I Disagree

The Post That Sparked This Response

Sarkis M. has 7,000 followers on LinkedIn. Last week he posted that HMOs are 'too complicated, low margins, more headaches than they're worth.' Seventy-two comments. Hundreds of reactions. A lot of nodding.

I read it twice. Then I pulled up Lendlord's Q4 2025 report — 1,158 live HMO properties analysed across the UK — and I couldn't reconcile what Sarkis was describing with what the data was showing me.

So I'm going to do something that LinkedIn apparently finds rare: disagree, with evidence.

The Numbers Sarkis Didn't Mention

A bright modern shared living room inside a well-maintained UK HMO property, clean Scandi-style furniture, large windows letting in natural daylight, neutral tones with warm wood accents, tidy kitchen visible in background, no people present, conveying quality rental accommodation, photorealistic interior photography style

Average HMO yield in Q4 2025: 9.6%. Average standard buy-to-let yield in the UK: 5–6%, depending on which index you use.

That's not a marginal difference. That's nearly double the return on the same capital base.

Lendlord's dataset also shows average annual HMO rent hitting £33,591 — up 18.9% year-on-year. Average property value: £330,362, up 15.8% in the same period. Both figures are moving in the right direction simultaneously, which is the kind of alignment most asset classes don't offer.

And if you think 'smart money' is fleeing the sector, consider this: The HMO Mortgage Broker's annual report shows HMO mortgage completions up 14% year-on-year, with rates sitting at 4.5–5.2% for 75% LTV. Lenders don't expand product ranges for dying asset classes. Investors don't complete 14% more mortgages in sectors they've abandoned.

The money is flowing in. Not out.

North East yields are currently running at 15.1% on this data. The North West now holds 17.9% of total HMO market share. These aren't fringe numbers from cherry-picked portfolios — they're averages across a dataset of over a thousand properties. I'd take 'complicated' at 15.1% over 'simple' at 5% without much hesitation.

The 'Complication' Argument Is Actually the Best Reason to Invest

Here's the part of Sarkis's argument I find most interesting — and most wrong.

He's right that HMOs are more complex than standard buy-to-let. Licensing requirements, mandatory HMO management regulations, Article 4 directions, room-by-room compliance checks. That's all real. I'm not pretending it isn't.

But complexity is a moat.

Article 4 directions — which require planning permission before converting a dwelling into an HMO in designated areas — are expanding across UK councils. That expansion restricts the supply of new HMOs entering the market. Which means existing, compliant HMOs become more valuable, not less, over time. You're not just buying a property; you're buying a permitted position in a supply-constrained market.

The landlords who find HMOs 'too complicated' are the landlords who aren't competing with you. Every time someone reads a post like Sarkis's and decides to stick with a standard single-let at 5.5%, that's one fewer competitor in your licensing application queue.

I'm not saying the complexity is trivial. Proper HMO management — tenant selection, room-by-room maintenance schedules, compliance audits — takes genuine operational discipline. If you're running an HMO like a single-let, you'll have the experience Sarkis describes. But if you run it as the business it actually is, the returns reflect that.

Consider consulting a qualified property solicitor before any HMO conversion or licensing application — the rules vary meaningfully by local authority, and getting them wrong is expensive.

What the 'Headaches' Argument Gets Wrong About Risk

The other claim in Sarkis's post — 'more headaches than they're worth' — is a risk framing issue, not a yield issue.

Standard buy-to-let carries concentration risk that HMOs don't. One tenant vacates a single-let and your rental income drops to zero. In a six-bed HMO, one vacancy is roughly a 17% income reduction. The others keep paying. That's a structural diversification benefit that single-let investors rarely account for when they compare 'simplicity.'

Void periods hit differently across property types. A single-let void can wipe out two months of net profit. An HMO with five of six rooms occupied still services its mortgage, still covers its bills, still generates positive cash flow in most cases. The 'headaches' of managing multiple tenants are, in part, the mechanism that creates this resilience.

I'll grant one genuine trade-off: management intensity. Self-managing a five or six-bed HMO is a meaningful time commitment — more so than a single-let. If you're not prepared to either invest that time yourself or pay a specialist HMO management company (typically 12–15% of gross rent for a quality operator), the model won't work as well. That's a real cost. It should be modelled before you buy, not discovered after.

But framing management intensity as evidence that HMOs 'aren't worth it' is like saying a restaurant isn't worth running because it's harder than a food van. The margins exist because the operation is harder.

The investors who will own the most valuable HMO portfolios in 2030 are the ones reading posts like Sarkis's right now — and going back to the data anyway. Complexity, licensing friction, and management intensity aren't arguments against HMOs. They're the reason the yield gap between HMOs and standard buy-to-let has held at nearly double for years. The moat is the complication. And right now, at 9.6% average yield on 1,158 properties, that moat is paying very well.