The Pros and Cons of In-House Maintenance vs. Outsourcing for Merced Property Management - Article Banner

Maintenance is often one of the most complicated – and expensive – parts of renting out a Merced investment property. If you don’t already have a preferred list of vendors and contractors in place, you could spend a lot of time and money trying to get repairs made at your rental property. 

Professional property management can help. Property managers are known for their resources, especially when it comes to maintenance. Some companies, you will find, operate with their own maintenance staff in-house. Others will outsource maintenance to local professionals. Many companies have a hybrid model, where they take care of some issues themselves and then hire out when they need specialists. 

Which is the best way to go? 

There may be no single answer. It depends on the needs of your property and the abilities of your management company. We do want to take a look at some of the pros and cons of working with an in-house maintenance team, however. 

Here’s how things look from our perspective.

Pros of In-House Maintenance vs. Outsourcing 

Perhaps the main benefit to working with a company that provides in-house maintenance is that all the control is centralized.  Your property manager knows exactly when the work is going to be completed, how much it will cost, and who will be completing it. 

Here is why we like in-house maintenance resources:

  • You Know You’re Working with Licensed and Insured Professionals

Having access to licensed and insured vendors and contractors is an important and valuable part of providing routine, emergency, and preventative maintenance to your rental property. Hiring someone you don’t know well is a huge risk. If you don’t have relationships in place already, you don’t really know what kind of work a vendor is capable of. You don’t know for sure if they’re licensed. Do they carry insurance? 

You welcome a lot of liability onto your investment property when you allow an unlicensed plumber to fix a leak. When a worker without insurance falls off a ladder and injures themselves at your property, guess who will be sued? 

It’s risky to just hire someone off the street to make important repairs. You don’t know if the problem will be solved. You don’t know if your tenants and your property will be treated well. You don’t know a lot of things because you have no experience with this person. 

When your Merced property management partner has an in-house maintenance team, you can expect them to provide a highly qualified, well-trained staff of professionals with backgrounds in maintenance and contracting. Your property managers will know what to look for when they are hiring people for their maintenance staff, and their entire team will know how to ensure the repairs are being done correctly, and at the right price. 

With in-house maintenance experts, you’ll know you’re getting licensed and insured professionals who can be counted on to do good work. You won’t have to worry about lawsuits and liability if someone falls off a ladder or gets into an accident. 

  • In-House Maintenance is Often More Affordable

No one enjoys the expense of maintenance, especially when there’s something unexpected that happens at the property. If you’re not sure what certain repairs and parts should cost, you can end up paying more than you should. 

The risk of overpaying is limited when you have access to an in-house maintenance team. Your property managers understand the repair and maintenance needs of your property, and they aren’t going to overcharge you because that would just be bad for business. They work closely with handymen and maintenance crews to make sure the needs are met affordably. You won’t go over budget, and you won’t have to waste time collecting bids from competing contractors. 

  • Emergency Responses are Immediate

In-house maintenance means that you will have someone on call 24 hours a day and seven days a week for those unexpected emergency repairs and maintenance issues. This provides a tremendous amount of peace of mind for owners. You understand that if something goes wrong at any time, you can call your property manager, and they’ll send someone over right away to handle the problem. 

Looking for someone who can respond during an emergency is stressful. Your property manager will immediately dispatch a professional to diagnose the problem and make a plan for resolving it. This is good for you because any further damage will be mitigated. It’s good for your tenants because their issue will be responded to immediately.

  • Property Managers do all the Scheduling and Delegating

There’s no waiting for a plumber or a drywall expert or an HVAC service technician to be available. When you’re working with an in-house maintenance team, you know that your property manager is prioritizing the work that’s needed. 

Keeping a maintenance team on staff means your property manager’s vendors are readily available to be scheduled for work. As a property owner, you don’t have to worry about the scheduling of any outside vendors. Your management team is in control of coordinating repairs, and it’s almost always more efficient.

Having an in-house maintenance team makes it easy to delegate tasks and keep track of progress on projects or repairs at any given time. You won’t have to wait for your property manager to track down multiple contractors for updates on different jobs being done around the property. Everything is centralized with your management team. 

Why Outsourcing Might Work Better for Merced Maintenance

While in-house maintenance generally offers several advantages and benefits to both property managers and rental property owners, there are often situations where it’s better to outsource the work. 

When a Merced property management company subcontracts out all maintenance, the property manager or the maintenance coordinator takes care of organizing routine and emergency maintenance needs between the vendors and your tenant. The vendor employs the workers and assumes all liability for those employees.  

Your property manager will be responsible for verifying the vendor’s professional license and insurance. If employees are involved, they need to have worker’s compensation insurance. 

  • Prioritizing Property Management

One of the reasons some property managers prefer to hire vendors and contractors from outside of their company is because they want to focus strictly on property management

This is understandable. If a company only has the capacity to handle the leasing and management of a specific number of rental homes, adding maintenance into the equation can be overwhelming. You don’t want to work with a management company that cannot handle different lines of business. 

So, a benefit to working with a management company that doesn’t have their own maintenance staff is that you know they’ll never be conflicted about where to spend their time; on the management side of the business or the maintenance side of the business. Property management will get all of the necessary attention and focus. 

  • Additional Costs Can Pop Up

Not all property management companies know how to handle their budgets and balance their time. If your management company is struggling to staff their in-house maintenance team, for example, you’re not really gaining much by having an in-house maintenance team. You need employees, and you need to be able to pay them and support them. If that doesn’t happen, your management company won’t have that in-house maintenance staff for long. 

  • Maintenance as a Revenue Source 

It’s not always comfortable to know that your property manager is making additional money off of you every time something needs to be fixed. Owners may wonder whether the management company is performing unnecessary maintenance just to be able to bill. It’s vitally important that this relationship is disclosed in the property management agreement.

  • Discounts can Still be Negotiated 

While pricing is a factor when we talk about the benefits to in-house maintenance, many owners and property managers will point to the fact that they can often negotiate good maintenance rates with the vendors to whom they outsource work. 

When a management company uses a vendor on a regular basis, they should be able to negotiate competitive rates. These discounts should be passed onto you, the owner. A good management company will also review and pay invoices on your behalf. You don’t need an in-house team to achieve this benefit. 

The Hybrid Solution for Your Merced Rental Home

In a hybrid scenario, the property management company may have an employee(s) with either a general contractor’s license or a handyman license who can perform general maintenance. The property manager or the maintenance coordinator will coordinate the work needed with the tenant and any specialized work, like plumbing, would be called out to a subcontractor. This can provide all the benefits of in-house maintenance and professional contractors and vendors who don’t work directly for the management company. 

Whichever scenario makes you more comfortable, make sure you have a transparent discussion with your Merced property management team about how maintenance will be handled. We can talk more to you about our process. Please contact us at River Drive Properties. 

Property ManagementRiver Drive Properties provides effective and professional property management services in Merced and the surrounding areas including Fresno, Modesto, Tulare, and Turlock. We have extensive experience with both single-family homes and multifamily properties.