• Southcourt Property Services Ltd. Est 1989.  Letting Agent Training since 1997
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How Much Do Letting Agents Earn?

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

Follow our guidance and you can set up a Letting Agency in a week or so, and unlike most businesses, you do not suffer from cash-flow problems, because you retain your fees at source – we show you how. You can also enjoy an ongoing and increasing residual income from management commissions which arrive automatically each month.

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 charges to tenants, letting only (tenant find) 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.

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.