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How Much Does A Letting Or Estate Agent Earn?
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 training and guidance and you can set up a Letting or Estate Agency in no time. Continue reading to find out how you can achieve a satisfying income in either lettings, sales or both – full time or part time, from home or office.
Letting Agent Income
There are two main services that Letting Agents offer to property owners:
The first is the rent-only service (also called “tenant find”) – this is where you find a tenant, and the landlord manages the property afterwards
The second is the full management service – this is where you continue to manage the property after you’ve found a tenant
The rent-only service provides sizeable fees of around 3 weeks rent for each tenant found. However, the management of tenanted properties is particularly attractive due to the residual commission income. This is because your total residual monthly income grows with each property added. So in year 2, you’re still earning from year 1 without any extra work, and so on.
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 and there is no need to send reminders. Once each payment has reached your account, you deduct your commission and forward the balance to the landlord.
Management fees vary, but we have used the UK average commission rate of 12% of the rent.
Letting Agent Income Growth
Monthly
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.
£1296 Per Month After 3 Months
£2592 Per Month After 6 Months
£5184 Per Month After 12 Months
Annual
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.
£65k Per Year After 1 Year
£130k Per Year After 2 Years
£194k Per Year After 3 Years
Additional Revenue Streams Available to Letting Agents
The above fees do not include additional streams of income available to letting agents such as:
- Financial advisor referral fees
- Photography fees
- Property letting fees
- Utility referral fees
- Tradesman commissions
- Inventory fees
- Tenants and landlords insurance
- Property inspection fees
- Landlord tenants renewal fees
- Rent Guarantee Insurance Commissions
Estate Agent Income
Most estate agents work on commissions of 1% to 1.5% of the sale price of a property. This means that for an average UK property, you’ll receive around £3500.
Selling just 2 properties per month will generate an income of around £7000 per month.
If you’re in London or anywhere else that’s above the UK average house price, your income can be significantly more.
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 you’ll be able to use the processes and methods that we show you to get in a position to start generating this income.
Once a price has been agreed, you’ll be carrying out some very simple admin tasks. This happens while the solicitors are working on the contracts and surveys are taking place. On the day of completion, 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 typical commission rate of 1.5%.
Estate Agent Income Growth
Monthly Income
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 £230,000 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.
£3450 Per Month After 3 Months
£6900 Per Month After 6 Months
£10350 Per Month After 12 Months
Annual Income
At an average house price of £230,000 and commission of 1.5%, your annual income growth can look like this:
Year 1 = £104,500
Year 2 = £212,500
Year 3 = £319,500 and so on…
Subject to market conditions and a little effort, you could well exceed these figures using our methods and techniques.
£104k Per Year After 1 Year
£212k Per Year After 2 Years
£319k Per Year After 3 Years
Why It's The Ideal Business
As well as being able to run the business full or part-time, from home or an office, 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.
This is one of the few businesses in the UK where it’s truly recession proof. Even in times of recession, your lettings commissions continue to be paid, while in times of growth, property sales can soar – it’s really the best of both worlds.
Don't take our word for it, read what our clients have to say
After researching the available start-up options I decided the Southcourt Package was by far the best choice due to their successful track record. When we started up it helped us massively, and is definitely part of our success. It is affordable, highly professional and innovative and allowed us to gain new clients quickly and effectively.
John Paul
Managing Director, The Castedene Group
"The initial pack we purchased was absolutely priceless and enabled us to build a two office business from nothing (soon to be 3) but without your wonderful support and knowledge, not to mention our brilliant new website courtesy of you, then I am sure we wouldn’t have had either the confidence or the know how to move the business forward the way it has. The website was easy to build with you guys, you listened to everything we wanted and we had a seemless transition…"
Jay Coleman
Angelwoods Residential Sales and Lettings
"We have been with Southcourt from when our business started. They have not only a very good service but more of a, as we see it, a valuable partner. Their products are good value for money and advice is also money saving in this competitive market. We would recommend Southcourt to all but never will, as we want to be the only ones that has this good service!!"
Irfaan
Citylocations Tooting, London
"The Southcourt Business Package was brilliant! It basically allowed me to learn everything I needed to know to sign up landlords, run my agency from home to fit in with my family and lifestyle then gradually grow the business at the speed I wanted. I also used their support service fairly often at the start and I have to say they really helped me get going – as Mike will testify to!"
Venessa Alfonja
VA Property Consultants
"I would like to say thank you to all at Southcourt Property for the excellent and professional service we have received since purchasing our business package and website. As a practising paralegal I don’t make key decisions lightly, and it was only after careful research that I chose Southcourt, as they clearly had more to offer both in terms of experience and customer satisfaction than similar products on the market. As my business develops it is reassuring to know that your support is just a phone call or email away."
Chris Blake
AT Property Lettings
"After embarking upon research in to opening an Estate Agency to complement our legal practice, I had the good fortune to discover Southcourt Property. Not only was I to obtain excellent advice on setting up an Agency but also to create a most professional and easily maintainable website at a fraction of the price quoted by traditional web designers. Steve and his team made the whole process so straightforward and operating the website in conjunction with their associated cloud software delivered efficiency to the whole processs. I would recommend Southcourt to anyone wishing to open an Agency. Their manual is a bible to be relied on and proved really educational for me as a beginner"
Diarmuid McKeown
McKeowns Solicitors
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