The Great Debate: Which is Better? On-Site or Off-Site Property Management?

After investing in a real estate property, you have one big decision to make: choosing how to manage your property. As an investor, you might not have the time to use a hands-on approach to managing your property, so you hire a property manager to do it for you. There are actually two options available: off-site and on-site property management. 

This is where the great debate ensues: which is the better option of the two? And how do you choose? In this guide, you will find the answers to these questions so you can be more confident in making your decision. 

Off-Site vs On-Site Property Management

First thing’s first, you need to distinguish the difference between these two approaches to managing a rental property. Both types of property management approaches have the same set of responsibilities. It is how they carry out those basic services that will differ. 

On-site property management refers to when the property manager lives within or close to the property being managed. For example, if you have a multi-tenant apartment building, they might live in one of the rental units in the building. Typically, this is a direct employment scheme wherein the property owner pays them directly for their services.

On the other hand, an off-site property management service is when you hire a company to look after your property (versus an individual). The property manager does not actually reside in the property being managed. Instead, they come into the building to perform regular maintenance checkups, engage with the tenants, and handle all other responsibilities expected of them. 

Off-Site vs On-Site Property Management: Pros and Cons

The best way to understand what approach to use is to closely look at the benefits and drawbacks of each type. You can check out the list of advantages and disadvantages for each type of property management below, so you can make the best decision. 

On-Site Pros

• The property manager will have a wider understanding of the needs of the building and its tenants because they have first-hand experience of living there (or seeing the day-to-day operations first-hand). 
• They are available to respond to the needs of tenants or to show potential clients around on short notice. 
• They provide you with a hands-on approach to maintaining the building and making sure that the tenants are happy. 
• They are readily available to oversee any potential issues in the building and notify you – the owner – so that they are fixed immediately. 
• They are personally invested in making the building safe and comfortable to live in for tenants because they also live in it. 

On-Site Cons

• If the property manager suddenly falls ill or is unavailable, you have to fill in for their job and responsibility since they work on their own. 
• They only offer services within the immediate area. This limits your ability to use their service when you invest in other properties in another area, forcing you to hire another on-site manager for that other property. 

Off-Site Pros

• They are run by a company with lots of staff, so it is not just one person who is handling all of the responsibilities of looking after your property. 
• They have access to all kinds of services you need, from legal to professional contractors. They will be able to provide any kind of service you need. 
• They are preferred by some tenants because they get to enjoy a certain level of privacy when the property manager is not on-site. 
• They are better equipped to handle the marketing aspect of the building. They do not need to be on-site in order to bring in potential tenants to the building or to make sure that the vacancy rate is low.
• They are available 24/7 to respond to your needs, such as emergency repairs or other tenant issues. 
• Since they have more staff available, they are better equipped to respond to client needs, whereas an on-site property manager could only deal with one task at a time. 
• They are able to help with managing multiple properties. The property management company simply has to add your new property to the account, which makes it easier to grow your real estate investment portfolio. 

Off-Site Cons

• They tend to be more expensive than an individual on-site property manager since you are hiring a team, not an individual. 
• There are some property management companies that offer a flat fee for their services. This means that you have to pay them a specific amount regardless of whether you have met your income target.  

How to Choose

There is no one-size-fits-all approach to choosing the right property management service. It will depend on your budget and the unique circumstances that come from your rental property needs. 

If you are not sure what the best fit would be, you can use the following factors to help you assess and choose the right approach. 

• Growth and income potential – As a real estate investor, your goal is to maximize your income so you can grow your investment portfolio and have a return on investment. 
• Access to services – You would expect to conduct frequent repairs and maintenance services to your property as part of its upkeep. Choose the approach that will give you access to the professional services you need at a better rate and more efficiently.
• Rent collection – Rent collection is the most important income-generating task that a property manager will do. Choose the approach to management that will streamline the rent collection method while also staying tenant-friendly. 
• Tenant screening – Consider how a property manager can simplify the process of screening tenants to ensure that they are qualified and won’t disrupt your ability to collect rent from your investment property. 

In fact, there are some property owners that have opted for a hybrid approach, which is a blend of on-site and off-site property management. It’s not always possible, but the idea is that you can choose whatever suits you and whatever helps you meet your investment goals. Make sure to consider the list of pros and cons above when making your decision.