Pros and Cons of Insourcing vs. Outsourcing Your SFR Property Services

sfr bathroom renovation

When it comes to services like inspections, tenant turns, lawn care and pool maintenance, are you better off managing these services in-house or outsourcing them for your single-family rental (SFR) properties?  The answer will likely hinge on factors like your business model, size of your portfolio, the location of your properties and other considerations. Exploring the benefits of outsourcing versus insourcing can help you determine the best property servicing strategy for your SFR properties.  

When Insourcing Works 

The pros: When you’re looking to streamline operations and reduce costs, insourcing isn’t typically the best option. But it can work in a few instances. For example, SFR operators with extremely small portfolios or ones that are within a single neighborhood might find some value in managing the work and relationships one-on-one.

Remember that if you do outsource, you’ll still need to have staff members provide oversight, QC or scoping in partnership with your outsourcing provider. But in that case, their goal should be to guide the flow of work and communication, not to complete the work.

The cons: The biggest obvious con is the internal staff required to manage and perform the wide variety of services. When inevitable shifts occur in your portfolio, it can affect the number and type of employees required to manage the work. One of the biggest benefits of outsourcing SFR property services is gaining a partner who can manage work orders, headcount and more—so you don't have to.   

The Benefits of Outsourcing 

The pros: For most SFR operators, the benefits of outsourcing tend to outweigh the cons, and it’s easy to see why. Outsourced property services can often be completed faster than when they’re managed in-house. While most in-house operations tend to complete work in phases, experienced outsourcing companies are efficient at stacking trades, so projects can be completed at a quicker pace. And if your services partner has the ability to self-perform, they most likely have the ability to handle to variety of services required with their own in-house team. 

Trusted outsourcing partners also have the market- and trade-specific knowledge an in-house operation wouldn’t be expected to have simply because it’s not their area of focus. When you work with an experienced outsourcing company that performs SFR property services for hundreds of clients each month , you gain experts in the rules and regulations of each municipality they serve. This means they can anticipate issues like local ordinances and what permits will be needed, have a handle on product availability and have the buying power needed to complete a project without delays.  
Having an external company conduct and manage SFR property services also yields greater accountability. You know who is ultimately responsible for every aspect of the work (without the need to personally manage it or multiple vendors) and your team can more effectively QC a completed project with fresh eyes versus checking your own work.

Working with an outsourced partner allows you to manage ups and downs in the number of assets being managed without having to add staff. For example, if dozens of houses are added to your portfolio at once, your property services partner should have the resources to scale up with your property count. On the flipside, as properties are sold you don’t have to worry about reducing staff because you can just reduce work your service partner provides. This flexibility can also help with budgeting and cash flow management as you can assign ranges of services to be performed on each property based on past expenditures.

The cons: With SFR services, there are truly few reasons not to outsource. Keeping services in-house might make sense for small SFR operators, but as you grow, the benefits of outsourcing quickly become apparent.

Looking for a Property Services Partner? 

If you’re looking for an outsourcing partner to help you increase operational efficiency, reduce costs and deliver a superior level of service for your tenants and turn around vacant properties faster, consider partnering with MCS. Contact Jason Myers or Kerry Anderson to learn more about how MCS can help support your properties through their entire lifecycle and maximize your investments.