Comparison Between In-House or Outsourcing Real Estate Management


Managing a real estate agency can be a handful. There are many tasks, duties and responsibilities that need to be attended to on a daily basis. But considering the competitiveness of the industry, real estate agencies have to be more aggressive in their efforts to reel in business. You may have to expand capabilities in order to accommodate greater work load. The question is: Should the agency set up an in-house team or consider outsourcing real estate management?

Setting up an in-house team gives you the advantage of close collaboration. Shared space work arrangements are generally easier to manage. You can easily oversee and monitor the performance of your people. Plus, you get to build stronger relationships as you are working 7 to 8 hours every day 22 to 26 days of the month.

But there are tradeoffs foremost of which are costs and risks of housing in-house teams. Although outsourcing has gained popularity as a business development solution the last 20 years, some real estate agencies are not comfortable joining the bandwagon.

If you are deliberating between an in-house team or outsourcing real estate management, here are 5 benefits you can get by delegating services to a third party service provider:


1. Maximize Operating Budget


The number one reason why real estate agencies outsource management duties and other related tasks is to generate cost savings.

Outsourcing services generally means contracting the services of an approved third party. You are not hiring them full- time on your staff payroll. The outsourcing partner or agency you contracted shall be responsible for the payroll and benefits of their management team and staff of agents.

The outsourcing partner is also responsible for their own costs of operations: Internet charges, utility expenses and contingencies. All of these costs are factored in their agency or management fees which are reasonable and subject to negotiation.


2. Improve Work Efficiency


As a real estate agency, you should allocate more resources to push your core business functions because these contribute directly to your bottom- line. Administrative tasks, marketing and sales are key areas of responsibility but you can outsource these to creditable third party service providers.

Administrative tasks such as e-mail filtering, calendar management and phone handling keep your business running in an organized manner. Marketing and sales are two distinct functions that need to work as a team to be effective in converting generated leads into clients.

By delegating these tasks, you can assure they will be managed by experts in their respective fields. As an agency you should have these tasks covered full –time.


3. Increase the Level of Productivity


If your agency had been managing administrative work, back office operations and customer support, you will feel your level of productivity rise exponentially almost immediately once you outsource these services to third party providers.

It would be like a heavy set of chains had been lifted off your shoulders. These tasks are important but otherwise considered non- essential because they do not directly add dollars and cents to your bank account. They are also not the core competence of your business.

Accounting, human resources, preparation of contracts, rent collection, taking inbound calls and reviewing tenant applications are best outsourced to third party service providers who are better at it than you are.


4. Reduce Risks of Managing a Business


When a business starts to grow and gain traction, it starts to decentralize most of its services. It opens up new departments, makes appointments and hires people to fill- in newly created positions.

But what happens when growth is cut short? What if market conditions become uncertain? What if legislation makes it too expensive to maintain employees? What if demand is no longer there?

Business is full of “what if” scenarios; conditions can turn without notice or warning. If business conditions become unfavorable, you may have to streamline costs and manpower is usually the first asset to go.

But terminating services is never easy. There is due process to observe and laws to follow. Then you will have to deal with the emotional issues of terminating employees. Finally, the payouts can be very expensive.

When you sign up outsourcing partners, there are less risks of managing the business because the conditions of the arrangement are covered by a clear- cut contract.

In many Client- Service Provider contracts, stipulations only include a 15 day window to remedy the problem followed by a 30 to 60 day grace period for turnover of services.

Outsourcing arrangements make it easier to expand or streamline your business. Companies that have to deal with downsizing due to profit declines end up in messier situations which ultimately could lead to shuttering of operations.


5. Generate Better Results


Whether you decide to outsource real estate management responsibilities to full- service agencies or a team of virtual assistants, you can assure your business of generating better results. It’s all about giving the job to someone who has the time and the requisite skills to do it better.

Here are a few examples:


  • Property Management – A great deal of property management work involves screening tenant applications, conducting due diligence, reviewing contracts and documentation, issuing billing statements and collecting overdue rent. You can outsource these to agencies that specialize in these types of services.
  • Marketing – In real estate, you have to actively implement your marketing campaign to expand your network, promote your services and generate more leads. But marketing takes time, effort and a strict adherence to timelines.You also need to produce consistently engaging and relevant content. You can create a team of virtual assistants that can handle these tasks for you or simply outsource this to a marketing agency.
  • Research – There will always be developments in the real estate industry. Trends and conditions can always change and influence investment decisions.


Your agency has to remain updated on news that can have an impact to your bottom-line. But conducting thorough and comprehensive research requires time and specialization.

It would be best to outsource research to an agency that can do this for you on a regular basis.

If you remain unconvinced of the benefits of outsourcing real estate management, start out with a pilot test group. Outsource administrative tasks while an in-house group continues to manage the other key areas of responsibility.

Once you feel more assured and confident of the outsourcing team’s ability to render reliable service, slowly delegate other tasks. It will take time but eventually, your agency would only have to focus on its core business functions.

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