What’s the ROI on HMOs in Greater Manchester in 2025? Real Numbers, Local Insight & Expert Tips
🏠 What Is an HMO?
An HMO (House in Multiple Occupation) is a rental property where three or more unrelated tenants share communal facilities such as kitchens or bathrooms. They’re popular with students, young professionals, and low-income workers — making them a high-demand asset class in major UK cities like Manchester.
📍 Why Greater Manchester Is Still a Top Location in 2025
Greater Manchester offers some of the highest rental yields in the UK, paired with strong tenant demand and relatively low entry prices.
Key advantages:
Student hotspots: Areas like Fallowfield and Rusholme are packed with students needing affordable accommodation.
Young professional demand: Salford, Eccles, and parts of the city centre are booming with postgraduates and early-career renters.
Affordable property prices: You can still acquire a solid HMO for under £200k in areas like Oldham and Rochdale.
Public transport & regeneration: Metrolink routes and Northern Powerhouse projects boost both rent potential and capital growth.
📊 Average ROI for HMOs in Greater Manchester – 2025
Here’s a breakdown of current performance across key areas, based on local market data and investor reports:
| Area | Average Purchase Price | Monthly Gross Rent | Gross Yield (%) | Net ROI (Approx.) |
|---|---|---|---|---|
| Fallowfield | £310,000 | £2,400 | 9.3% | ~6% |
| Salford | £275,000 | £2,100 | 9.1% | ~5.7% |
| Oldham | £190,000 | £1,600 | 10.1% | ~6.5% |
| Rochdale | £180,000 | £1,500 | 10.0% | ~6.3% |
💡 Net ROI is after deducting typical running costs: mortgage payments, management, maintenance, voids, compliance, and insurance.
💸 Hidden Costs That Can Kill ROI (If You’re Not Careful)
Even if gross yields look tempting, real ROI can shrink fast without good planning. Here’s what can eat into your profits:
Licensing & compliance
HMO licence fees, fire doors, alarms, EICRs, EPCs, planning permissions, council tax banding — it adds up.Refurbishment costs
Converting a single-let into an HMO can require £20–£50k or more, depending on ensuite additions and layout changes.Ongoing management
Most landlords use agents, which typically charge 10–15% of rent. DIY management saves money but increases workload.Higher tenant turnover
More tenants = more wear and tear, more voids, and more admin.
🔁 Should You Convert a Single-Let to an HMO?
Converting an existing property can significantly increase rental income — if done right. Here’s a quick checklist:
✅ Sufficient space for 4+ tenants
✅ Potential for 2+ bathrooms or ensuites
✅ Located in a high-demand rental zone
✅ No Article 4 restrictions (planning control on new HMOs)
✅ Solid demand for rooms vs whole flats
🛠️ Top Tip: Always run a feasibility study before converting. It’s not just about rooms — it’s about layout, comfort, and compliance.
💬 Real Local Insight from Let Me Manchester
“HMOs with 4 to 6 well-designed rooms — especially with private bathrooms and fast WiFi — are flying out. Properties near tram stops or universities see the highest demand. Oldham and Salford are delivering brilliant net returns right now for investors who do their homework.”
— Let Me Manchester, HMO Lettings & Management Specialist
🔐 Compliance in 2025: Tighter Rules, Smarter Investors
Local authorities are clamping down on substandard HMOs. If you want long-term profits:
Invest in quality: Good tenants pay more and stay longer
Stay compliant: Avoid fines, licence revocations, and voids
Track performance: Use data to optimise room rates and reduce voids
📈 Final Thoughts: Are HMOs Still Worth It in 2025?
Absolutely — but only if you treat them like a business.
Done well, HMOs in Greater Manchester can generate:
Net ROI of 5–7% per year
Excellent cashflow
Strong capital growth potential
But done poorly, they can drain your time and money.
🛠️ Need Help Sourcing or Managing Your HMO?
Let Me Manchester specialises in:
Finding high-performing HMO deals
Helping you convert properties safely and legally
Full-service lettings and management
Expert guidance on compliance and profitability