As a letting or estate agent you can earn more than £100,000 per year.
Modern Estate Agents offer a range of packages that include both fixed-price packages and commission based fees, and sometimes a hybrid of the two.
Modern Letting Agents usually charge a percentage of the rent, for either a Rent-Only or Full Management service.
Below we show these scenarios in more detail, separately for both lettings and sales, and how the fees can multiply when you’re running a letting or estate agency.
Estate Agent Business Income
The advantage of running an estate agency is that you can handle several sales simultaneously, each of which can be worth £thousands. By having several properties on your books at once, your role will be to identify buyers for the properties that you’re selling. When you become an estate agent with our Business, Professional or Platinum Package, you’ll be able to use the methods we show you to get in a position to start generating this income.
Once a buyer has been found and a price negotiated, you’ll be carrying out some simple admin tasks, while exchange of contracts and completion takes place. The sellers solicitor will pay your commission directly into your bank account.
Property values vary across the country, so in the examples below we’ve used an average property value of £215,000 and a modest commission rate of 1.5%.
Estate Agent Income Growth
Starting at a rate of just 1 property per month rising to 3 properties per month after 12 months, at the average UK property price of £215,000 and a commission of 1.5%, the following examples show how your commission income quickly builds. On top of this you can add your fixed fee income for marketing properties.
Running an estate agency alongside a letting agency is particularly attractive. You’ll be able to leverage your combined skill-set and achieve the win-win where you sell a property to an investor, who then asks you to find a tenant and manage it for him/her.
At an average house price of £215,000 and commission of 1.5%, your annual income growth can look like this:
Year 1 = £96,750
Year 2 = £129,000
Year 3 = £161,250 and so on…
Subject to market conditions and a little effort, you could well exceed these figures using our methods and techniques.
If you’re running both a lettings and estate agency business business, the lettings business will feed clients to your estate agency business, and vice versa. For example, someone who’s thinking of selling may decide to rent due to a change in circumstances. Someone who’s been renting with you may decide to sell with you or buy one of your properties. Either way, you’ll be able to help with a professional service, and you benefit financially either way while providing a useful and much needed local service.
Letting Agent Business Income
There are two main services that Letting Agents offer to landlords:
The first is the rent-only service (also called tenant find)
The second is the full management service.
Whilst the rent-only service provides sizeable fees, the management of tenanted properties is particularly attractive due to the residual commission income.
Why is starting a letting agency so financially attractive?
The powerful attraction of property management is that your total monthly income grows with each property added. All tenants pay their rent by standing order directly into your agency bank account. This system is automatic, and you don’t physically collect any money at all. Once each payment has reached your account, you deduct your commission and forward the balance to the landlord.
Property rentals vary across the country, so in the examples below we have shown income at 3 different levels. Letting Agency fees also vary, and we have used a moderate commission rate of 12%.
Letting Agent Income Growth
Monthly Income Growth
At the modest work rate of just one property added each week, the following examples show how your commission income quickly builds
a) on a monthly basis, and
b) on a yearly basis.
Bear in mind that the process is cumulative – existing properties are providing ongoing commission each month while you’re adding new ones. The examples are based on average UK rent of £900 per month, and just 1 property per week.
At average rentals of £900 per month your commission income at end of:
Year 1 = £64,800,
Year 2 = £129,600,
Year 3 = £194,400 and so on…
Subject to market conditions and a little effort, you could well exceed these figures using our methods and techniques. Remember that many landlords will give you not just one property, but their entire portfolio to manage. It is not uncommon these days for a single branch letting agency to manage over 500 properties.
Additional Revenue Streams Available to Letting and Estate Agents