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How Much Do Letting and Estate Agents Earn?

As a letting or estate agent you can realistically earn in excess of £100,000 per year

Follow our guidance and you can set up a Letting and/or Estate Agency in no time, and unlike most businesses, you do not suffer from cash-flow problems, because for lettings you retain your fees at source – we show you how. You can also enjoy an ongoing and increasing residual income from commissions which arrive automatically each month.

Letting Agents

There are two main services that Letting Agents offer to landlords:

  • the letting only service (also called tenant find)
  • the letting & full management service.

Whilst the letting only service provides sizeable fees, the management of tenanted properties is particularly attractive due to the residual commission income.

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 account, you deduct your commission and forward the balance to the landlord.

Property rentals vary across the country, so in these examples we have shown income at 3 different levels. Letting Agency fees also vary, and we have used a moderate commission rate of 12%.

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. This is what we call your OTE or on-target earnings. Bear in mind that the process is cumulative - existing properties are providing ongoing commission each month while you're adding new ones:

Monthly Income Growth

M: Month, P: Properties

MP£600 pcm£900 pcm£1200 pcm
14£288£432£576
28£576£864£1,152
312£864£1,296£1,728
416£1,152£1,728£2,304
520£1,440£2,160£2,880
624£1,728£2,592£3,456
728£2,016£3,024£4,032
832£2,304£3,456£4,608
936£2,592£3,888£5,184
1040£2,880£4,320£5,760
1145£3,168£4,752£6,336
1250£3,456£5,184£6,912

Therefore at average rentals of £900 per month your monthly income after 12 months = £5184. This is commission income alone and does not include other regular fees income.

Annual Income Growth

Y: Year, P: Properties

YP£600 pcm£900 pcm£1200 pcm
1 50 £43,200 £64,800 £86,400
2 100 £86,400 £129,600 £172,800
3 150 £129,600 £194,400 £259,200
4 200 £172,800 £259,200 £345,600
5 250 £216,000 £324,000 £432,000

At average rentals of £900 per month your commission income at end: 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.

You should also bear in mind that:

  • For simplicity we have ignored additional fees such as letting only (tenant find) fees, inventory charges to landlords, renewal fees to landlords, insurance commission, and income from various spin-offs which we explain in detail
  • Management commissions continue to arrive automatically every month, even when you're on holiday or otherwise engaged.

As you can see, as a Letting and Managing Agent you can enjoy a superb recurring income from the vibrant property rental 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!

** Recent research by specialist buy-to-let mortgage lender Paragon Mortgages found that the average landlord now owns 12.9 properties. This means that a new letting & managing agent will need to acquire just 8 average landlord clients to build an agency management portfolio of 100 properties.

You're in complete control, so you decide how much you wish to earn.

More about Becoming a Letting Agent

More about Becoming an Estate Agent

Estate Agents

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.

The advantage of running an estate agency is that by following our processes you can handle several sales simultaneously, each of which can be worth thousands of pounds. 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 Start Up Business Package, you’ll be able to use the methods we show you to be 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 £230,000 and a modest commission rate of 1.5%.

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 £230,000 and a commission of between 0.5% and 1.5%, the following examples show how your commission income quickly builds. On top of this you can add other sources of income that we shown you in the Business Package.

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 them.

Monthly Income Growth

M: Month, P: Properties per month

MP0.5%1%1.5%
11£1150£2300£3450
21£1150£2300£3450
31£1150£2300£3450
42£2300£4600£6900
52£2300£4600£6900
62£2300£4600£6900
73£3450£6900£13800
83£3450£6900£13800
93£3450£6900£13800
104£4600£9200£13800
114£4600£9200£13800
124£4600£9200£13800

Therefore at average price of £230,000 and commission of 1.5% your monthly income after 12 months = £13,800. This is commission income alone and does not include other regular income that we show you in the Business Package.

Annual Income Growth

Y: Year, P: Properties per year

YP0.5%1%1.5%
1 30 £34,500 £69,000 £103,500
2 60 £69,000 £138,000 £207,000
3 75 £86,250 £172,500 £258,750
4 90 £103,500 £207,000 £310,500

At the average house price of £230,000 and an industry average % commission of 1.5%, your commission income at end: Year 1 = £103,500, Year 2 = £207,000, Year 3 = £258,750 and so on…

Subject to market conditions and a little effort, you could well exceed these figures using our methods and techniques. You can also exceed them if you live in London or operate in another area of the UK where the average house price exceeds our UK average above of £230,000.

More about Becoming an Estate Agent