If you fancy yourself as a people person who knows how to put a deal together, you might envisage yourself working in the property industry.
There are two primary options for those who want to make a living from bricks and mortar: letting agents and estate agents. One rents homes out; the other sells them.
To be a letting agent or estate agent, that is the question. But what is the answer?
That’s what we’re here to help you decide. We’ve got the lowdown on the differences between letting agents and estate agents, looking at aspects like job roles and earnings. So read on and find out whether you should be a letting or estate agent.
What is the difference between a letting agent and estate agent?
The key difference between letting agents and estate agents is, of course, is that one rents and the other sells.
Letting agents work in the rental market and facilitate lets between renters and landlords. Deals can take days or weeks, and letting agents make a commission based on the annual rental figure while receiving a base salary. Letting agents are often referred to as “negotiators”, as there are several components to the industry, including property management.
Estate agents, on the other hand, are exclusive to the sales market and work on brokering deals between vendors (sellers) and home buyers. Unlike lets, buying and selling homes takes longer, with the average sale taking around 65 days to complete. Estate agents also receive a base salary and a percentage of the final sale figure.
Who earns more?
Let’s get straight to the point: earnings is a primary driver for anyone who is thinking about a career as a letting or real estate agent. It won’t be the sole purpose of making a decision, but it does play a fundamental role. So who makes more?
The answer isn’t a straightforward one. Estate agents usually charge between 1% and 3% of a property’s sale. If a home sells for £300,000, and the agent takes 2%, that’s £6,000 in commission. Taking into account the length of time involved with selling a home, however, means property sales take longer to complete .
Letting agents offer several charing options from let only to full management But let’s use the let only service for the purpose of comparison. A let-only service means only finding a renter and sees letting agents charging around 8-12% of the annual rental income. Even at the lower end, 8% of £20,000k per year property amounts to £1,600.
Of course, it’s much easier to do several lets throughout the month than it is to sell lots of homes. Even though the commission is smaller, there’s a chance for higher volume. It’s also important to note that letting and estate agents may not see the entirety of that commission, with some of the fee going towards other aspects. But these numbers provide a good barometer.
And the winner is...
A recent study found that letting agents are, in fact, more successful than estate agents – at least from a financial point of view. According to research, 60% of letting agents earn over £30,000 per year, with only 50% of Estate agents making the same sum. A further 8% of letting agents earn more than £100,000 per year in comparison to estate agents, where it’s 6%.
Being an estate agent can be profitable, but letting agents just edge it for the win in our opinion. The ability to turn over more deals, not to mention using awesome platforms like Movebubble to find high-calibre renters, means letting agents potentially have more avenues for higher turnover. And you get to find great homes for renters. What more could you ask for?