The Impact of Paying for Property Management on Nomad Investors

[James Orr]

I woke up this morning thinking about the impact that hiring a property manager has on buying a series of investment properties using the Nomad investing strategy.

While I used properties for Northern Colorado (Fort Collins, Loveland, Greeley area), I think the lessons apply to lots of other markets.

For my assumptions, I assumed everything was the same EXCEPT in one scenario I hired a property manager at 10% of gross rents and the other I self-managed.

If you're not paying a PM, you end up being able to buy the properties faster. Here's a chart showing how quickly you're able to acquire 10 properties via the Nomad investing strategy.

That means you start collecting rents earlier.

Which means you have better cash flow (including cash flow from depreciation here as well).

Which means you see more money in your account (which is why you can buy the properties quicker).

Net worth over time.

Net worth in month 480 that's year 40.

If you adjust for inflation, still significant in my opinion.

TLDR: Hiring a property manager costs you over $5M over 40 years.