How much money do real estate agents earn and what expenses will you incur? Read on to find out about the financial realities of being an agent.
Unlike traditional salaried positions, real estate agents enjoy an uncapped earning potential based on their performance and results. Your income is directly tied to your ability to secure listings, negotiate successful deals, and build a strong reputation. The more you put into your career, the more you can potentially earn.
Average earnings and beyond
According to Talent.com, the average annual salary for real estate agents in Australia is around $115,000. However, most agents fall within a broader range, earning between $50,000 and $100,000 annually. Top-performing agents with established reputations can earn well over $150,000 per year. Property managers have a typical salary around $76,000 per year.
Income structure
When starting out, make sure you are clear how your earnings will be structured in the agency you decide to work with. Many sales agents work under a ''debit-credit'' system. This is where they are paid a minimum monthly wage but when the commissions earned exceed the base wage, the difference is added to their pay. However, any negative balance can roll into the next month. This means that agents who don’t hit their target may need to sell additional properties in the future to earn extra money. If that’s the structure, you’ll need to have a plan for covering any shortfall.
Commission-based success
Real estate agents typically earn their income through commissions as a percentage of the property's sale price or rental income. For sales, this is typically between 1% - 2.5%, while rental commissions can range between 3% to 7% or higher in some states. While this may not sound like a lot, with property prices at their current levels, the returns can be considerable. The commission-based structure means your efforts directly translate into financial rewards with every successful sale or lease brings you closer to your goals.
Managing your finances
The potential for high earnings is exciting but it is essential to be aware of the financial realities of being a real estate agent. Starting your career will involve expenses like training, licensing, marketing materials, and potentially office fees that you will need to cover. You should also allow for ongoing costs for advertising, technology, and professional development. Your income as a real estate agent may also be variable due to market conditions or early in your career while you are establishing yourself.
How much could you earn?
Find out how much you could earn as a real estate agent by using our handy calculator.
