HMO vs Single Let: Which Strategy Makes More Money in 2025?

Intro:

Thinking of getting into property but not sure which route makes more money - single lets or HMOs?

You’re not alone. Many investors start with a standard buy-to-let but quickly realise it’s not delivering the cashflow they hoped for. Enter the HMO.

In this guide, we’ll break down the real differences, the numbers that matter, and how to choose the right strategy for you in 2025.

1. What’s the Difference?

• Single Let: You rent the whole property to one tenant or family on a single tenancy agreement. Simple and low-hassle.
  
  
• HMO (House in Multiple Occupation): You rent the property by the room to 3 or more unrelated tenants, each with their own contract (or under one group tenancy).
  
  

The setup, income, and effort levels are very different - so is the potential return.

2. Which One Makes More Money?

Let’s look at a real-world example.

Single Let Example:

• 3-bed house in Nottingham
  
  
• Rent: £1,100/month
  
  
• Mortgage + bills: £850
  
  
• Net cashflow: £250/month
  
  

HMO Example (Same Property Converted):

• 4 rentable rooms @ £500 each
  
  
• Rent: £2,000/month
  
  
• Mortgage + bills + management: £1,300
  
  
• Net cashflow: £700/month
  
  

That’s nearly 3x the income from the same building.

3. Why Does an HMO Make More?

Because you’re letting by the room, you create multiple income streams under one roof. Your overheads (mortgage, council tax, etc.) stay largely the same - but your income multiplies.

It’s not unusual for a well-run HMO to generate £500–£1,000+ in monthly cashflow, even after expenses.

4. What About the Downsides?

More income comes with more responsibility. With HMOs, you’ll need to:

• Get licensed (if applicable in your area)
  
  
• Meet fire safety and room size standards
  
  
• Stay on top of multiple tenants and more wear-and-tear
  
  
• Possibly deal with Article 4 if converting a property
  
  

But if you get the setup right, most of this becomes manageable - or you can outsource it to a letting agent.

5. Which One’s Best for You?

Choose Single Let if:

• You want low-touch, passive income
  
  
• You’re new to property and want to build confidence
  
  
• The local rental demand doesn’t support HMOs
  
  

Choose HMO if:

• You want higher cashflow and better ROI
  
  
• You’re willing to learn the rules or work with professionals
  
  
• You’re investing in student areas or cities with strong rental demand
  
  

6. The 2025 Takeaway

With mortgage rates rising and living costs squeezing landlord margins, many investors are shifting towards HMOs to stay profitable. If done right, they can be a powerful cashflow machine - even in today’s market.

Free Masterclass: Learn How to Build a High-Cashflow HMO the Right Way

Join our free, no-pressure webinar where we walk through:

• How to find the right area for an HMO
  
  
• What kind of returns you can expect in 2025
  
  
• Licensing, legal checks and compliance (without overwhelm)
  
  
• Real case studies from investors who’ve made it work
  
  

Final Word:

Single lets are safe. HMOs are smart - when done right. If you’re serious about building income that actually covers your life, an HMO can get you there faster.

But knowledge is key. Make your decision based on facts, not fear. Start by getting clued up - and we’ve got just the place to begin.