As a letting or estate agent, you can earn more than £100,000 per year. Our examples below are for first letting agents, then for estate agents. Of course, many of our clients do both, therefore have the opportunity to double their income 🙂
Letting Agent Income
There are two main services that Letting Agents offer to landlords
- the letting only service (also called tenant find) – where you charge a fixed fee to the landlord to find a tenant
- the letting & full management service – where you charge a % of each monthly rental for each property
Whilst the letting only service provides sizeable fees, the management of tenanted properties is particularly attractive due to the residual commission income, which flows in even when you’re on holiday!
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 money at all. Once each payment has reached your bank 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, and we have used a moderate commission rate of 12%.
You’re In Control
As a Letting and Managing Agent and/or Estate Agent you can enjoy a superb income from the vibrant property rental and sales market without the financial burden of buying and maintaining the properties yourself. Just 8 properties under your management will produce more than owning one mortgage-free buy-to-let property – and you will not lose a penny if property prices fall. And just 3 property sales per month can result in an income far exceeding £100k per year. You’re in complete control, so you decide how much you wish to earn, part-time or full-time.
Monthly Income Growth
At the modest work rate of just one property added each week (it’s not hard), the following examples show how your monthly income quickly builds.
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.
£1296 Per Month After 3 Months
£2592 Per Month After 6 Months
£5184 Per Month After 12 Months
Estate Agent Income
As an estate agent you can realistically earn more than £100,000 per year (separate from lettings). Estate Agents charge a percentage commission on the value of the property they’re selling. In the UK the average commission is around 1% to 2% or even higher in some areas. So for a property valued at £300,000, and a commission of 1.5% you will earn £4500. (Note the UK average property price is around £285,000).
How can an estate agency generate a significant income?
The advantage of running an estate agency is that you can handle several sales simultaneously (yes £4500 earned several times). 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 well-proven Business Package, you’ll be able to use the methods we show you to learn how this is often the most enjoyable part. 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.
Monthly Income Growth
Starting at a rate of just 1 property per month rising to 4 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. 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. This is a particularly attractive proposition, while providing a useful and professional service to all parties.
£3450 Per Month After 3 Months
£6900 Per Month After 6 Months
£10350 Per Month After 12 Months
If you’re running both a lettings and estate agency business business, you’ll earn on both businesses. Additionally, 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. You can provide this service! 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.