February 22, 2023

Are Outsourcing Property Management Services Cost-Effective?

Outsourcing property management services

Finding a professional, long-term, committed staff member for property management can be difficult in the real estate sector. To reduce the administrative workload on their local property management teams, several organizations are now outsourcing property management services.

Therefore, a question can be asked, “Are outsourcing property management servings actually cost-effective?”

Your organization’s overhead and staff costs can be reduced by up to 60% by employing an outsourced team to help your onshore departments with these property management activities for a fraction of the cost.

So, let’s crack it below!

Why Is Outsourcing Property Management Service Cost-Effective?

Although it may cost money to outsource property management, doing so can also result in financial savings. This is so that professional property management organizations can access a wider range of resources and competencies at a lower cost.

Additionally, you’ll gain from knowing that your rental property and the services provided to the tenant are in compliance with the law. This will lead to tenants staying in their apartments for longer, fewer rental vacancies, and a reduction in lost money.

A charge that has been agreed upon enables you to budget since it will not fluctuate based on how much time the managing agent must spend taking care of your home.

What Is The Average Cost to Outsource Property Management?

Property inspections are a common property management duty that is outsourced. Today, a lot of real estate organizations outsource inspections, including move-in, move-out, and in-residence inspections.

Property inspections performed by outside companies typically cost $50 each inspection. The cost to outsource property inspections for a property management company managing 300 doors and performing four inspections a year would be $60,000. 

This amount exceeds the typical cost of a property manager’s pay, it should be noted. A typical property manager’s weekly workload includes about 50% of property inspections.

Accordingly, it would cost a property management company about $27,500 annually to provide a crucial service to landlords for a property manager making an average yearly income of $55,000.  As a result, hiring a property manager to conduct inspections is less expensive overall than outsourcing property inspections, which would cost about 55% more.

Why Outsourcing Property Management Services Are Beneficial?

  • Lower the risk:

By allowing several experts to handle their areas of expertise, outsourcing specific departments or the entire property management helps spread the risk. 

You decrease the likelihood of failure by leaving the management of the marketing area in the hands of a marketing agency or the management of the communication division by a customer relations agency.

  • Concentrate on Other Crucial Issues:

You’ll be able to concentrate on other things, like your job, if you outsource your property management. Property owners typically lack expertise in the fields of real estate, building, or business. An owner of real estate could pursue employment in another industry and still succeed in real estate investing.

  • Get Help From Professionals:

Your employees might be competent at property management, but they might not be industry specialists. And an expert will always be needed to handle some intricate features of your home.

  • Faster task completion:

With outsourcing, a distinct person is assigned to each task. This indicates that more work gets done in a given time frame than would have been possible with a smaller staff within that time frame. A smooth operation is produced by the quick workflow.

The main objectives of real estate investing are to maximize return on investment and to draw in as many clients as possible. However, many landlords consistently fall short of maximizing earnings because they are unable to sell their buildings or fill the empty rooms. The longer a property is unsold or vacant, the more it depreciates and reduces profits.

How to Outsource Property Management

If you choose the proper partner, outsourcing is simple. These are the main actions:

  • Make a decision: 

Decide which services you want to contract out. As long as you have the correct outsourcing partner, you may outsource all back-office functions. These tasks can be carried out virtually by assistance.

  • Keep choosing:

Find a partner for outsourcing who has expertise in the real estate industry. Choose a partner if saving money is one of your objectives.

  • Work collaboratively:

Make sure the partnership runs smoothly and is free of cultural misunderstandings by working with the outsourcing partner.

4 Drawbacks of Outsourcing Property Management

  • You must pay close attention to the standard:

In order to maximize their profits rather than concentrating on the end result, some contractors take on as many contracts as they can.

  • Fail to provide service:

Trusting a third-party service provider might be dangerous at times. Lack of control over the contractor is the key issue here.

  • You split financial costs:

While enlisting the help of professional organizations to share in the risks can be pleasant, connecting your firm’s finances to those of another company can be quite risky

  • You Might Lose Concentration:

The task you are outsourcing may not be getting the attention it needs because many outsourcing companies or freelancers serve numerous clients at once. That lack of concentration could hurt your small firm, depending on the processes you’re outsourcing.

The Solutions of The Challenges

1. Prior to beginning a project, a company should adopt a strategic approach to outsourcing and obtain a time estimate from the outsourced service provider.

2. To get around this issue, a company looking to outsource a project should set up a training program to educate its staff on the organizational, geographical, and social norms of the outsourced service provider.

3. Utilizing instant messaging and video calling solutions can help with communication problems.

4. Signing legally binding documentation, such a non-disclosure agreement with the outsourced vendor, will help you avoid this difficulty.

5. You can establish appropriate business hours where you can speak with each other to close the communication gap.

Administrative Task of Outsourcing Property Management

Administrative work in property management has become more and more popular to outsource. There are many different jobs that need to be finished every day when it comes to property management.

  • New leadership:

Creating the management contract, sending confirmation letters to the appropriate parties, adding the rental property and the owner to the property management software, and uploading and syndicating marketing materials to the appropriate web portals are all necessary steps.

  • Brand-new leases:

Processing lease applications, creating leasing agreements and related paperwork, and adding tenants to property management software.

  • Inspections of residential properties:

The creation and distribution of entrance notices to tenants.

  • Early dismissals:

composing and mailing pertinent letters, forms, and papers; posting and syndicating marketing content; and upgrading property management software with pertinent software.


1. What is outsourced property management?

In order to outsource your company’s property management, you must assign some of the related activities to an outside party.

2. Why is property management outsourced?

Task management without delay is possible through outsourcing. You can manage more of the business-related tasks on which you want to focus.  If you have problems with specific areas of your property management company, outsourcing is also a great option.

3. What proportion do the majority of property managers take?

For a single-family property, the monthly general management cost normally ranges from 8% to 10% of the rent; flat rates for the fee are uncommon.

To Conclude

Managing your property will be simpler for you if you ask for our help. We’ll see to it that the functions of your externally contracted property management team get all the assistance they need. You can contact us right away for a free estimate on the services we offer.