There are two main services that Letting Agents offer to landlords - the letting only service (also called tenant find), and 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 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:
Monthly Income Growth
| Month |
Properties |
£500.00 pcm |
£700.00 pcm |
£900.00 pcm |
| 1 |
4 |
£240.00 |
£336.00 |
£432.00 |
| 2 |
8 |
£480.00 |
£672.00 |
£864.00 |
| 3 |
12 |
£720.00 |
£1,008.00 |
£1,296.00 |
| 4 |
16 |
£960.00 |
£1,344.00 |
£1,728.00 |
| 5 |
20 |
£1,200.00 |
£1,680.00 |
£2,160.00 |
| 6 |
24 |
£1,440.00 |
£2,016.00 |
£2,592.00 |
| 7 |
28 |
£1,680.00 |
£2,352.00 |
£3,024.00 |
| 8 |
32 |
£1,920.00 |
£2,688.00 |
£3,456.00 |
| 9 |
36 |
£2,160.00 |
£3,024.00 |
£3,888.00 |
| 10 |
40 |
£2,400.00 |
£3,360.00 |
£4,320.00 |
| 11 |
45 |
£2,700.00 |
£3,780.00 |
£4,860.00 |
| 12 |
50 |
£3,000.00 |
£4,200.00 |
£5,400.00 |
| Therefore at average rentals of £700 per month your monthly income after 12 months = £4,200 | | |
Annual Income Growth
| Year |
Properties |
£500.00 pcm |
£700.00 pcm |
£900.00 pcm |
| 1 |
50 |
£36,000.00 pa |
£50,400.00 pa |
£64,800.00 pa |
| 2 |
100 |
£72,000.00 pa |
£100,800.00 pa |
£129,600.00 pa |
| 3 |
150 |
£108,000.00 pa |
£151,200.00 pa |
£194,400.00 pa |
| 4 |
200 |
£144,000.00 pa |
£201,600.00 pa |
£259,200.00 pa |
| 5 |
250 |
£180,000.00 pa |
£252,000.00 pa |
£324,000.00 pa |
| At average rentals of £700 per month your income at end: Year 1 = £50,400, Year 2 = £100,800, Year 3 = £151,200 etc... |
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, but several properties.** It is not uncommon these days for a single branch letting agency to manage up to 500 properties.
You should also bear in mind that:
- For simplicity we have ignored additional fees such as charges to tenants, 'letting only' fees, inventory charges, renewal fees, 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.
You're in complete control, so you decide how much you wish to earn.
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